India’s warehousing sector witnessed strong growth in 2024, with transaction volumes rising 12% year-on-year (YoY) to 56.4 million square feet (mn sq ft) across eight primary markets, according to a report by Knight Frank India. The sector also holds significant development potential, with an estimated 233 mn sq ft of unutilized land available for future expansion.

Mumbai emerged as the largest warehousing market, accounting for 18% of total transactions at 10.3 mn sq ft. The third-party logistics (3PL) industry drove demand in Mumbai, constituting 43% of transactions. The National Capital Region (NCR) followed, contributing 16% of the total volume, with 3PL and manufacturing sectors comprising 38% and 24% of demand, respectively. Other major markets, including Bengaluru, Kolkata, Chennai, and Ahmedabad, experienced YoY transaction growth between 25% and 29%.

The manufacturing sector remained the primary demand driver, accounting for 39% of total transactions, with 22 mn sq ft leased in 2024—an 18% increase from the previous year. The 3PL sector, while still a key player with a 30% market share, saw a 9% decline in volume, as occupiers committed to long-term leases with warehouse developers. Meanwhile, e-commerce showed signs of recovery, increasing its share from 5% in 2023 to 9% in 2024.

Knight Frank’s report highlighted significant investment growth in the sector, with private equity (PE) investments soaring 136% to USD 1,877 million in 2024. The warehousing market’s expansion beyond primary hubs into secondary markets also contributed to overall growth, with secondary market transactions rising 6% YoY to 11.4 mn sq ft.

Pune recorded the highest warehousing rental rates at Rs 26.6 per sq ft per month, while Mumbai and Kolkata saw rental growth of 4% each. Despite increasing demand, vacancy rates stood at 11.5%, keeping rental growth moderate.

Shishir Baijal, Chairman & Managing Director of Knight Frank India, remarked, “India’s warehousing sector continues to attract significant institutional interest. The combination of manufacturing expansion, strong occupier demand, and investment inflows positions the sector for sustained growth, reinforcing India’s role in the global logistics landscape.”