India’s warehousing and logistics (W&L) sector witnessed a surge in investment inflows, reaching $1.96 billion in 2024, accounting for 29% of total institutional investment in real estate, according to Vestian’s latest report. This marks a 203% year-on-year increase, driven by the rapid growth of the quick commerce sector.
Record Absorption and Investment Trends
The sector recorded an all-time high absorption of 44.9 million sq. ft. in 2024, reflecting a 19% increase from 2023. The second half of the year alone saw 28.3 million sq. ft. absorption—a 70% rise over H1 2024. Mumbai led the market with 18.6 million sq. ft. absorbed, followed by Pune with 13 million sq. ft., an 85% annual jump. In contrast, NCR saw a 55% decline, contributing only 9% to total absorption.
The dominance of third-party logistics (3PL) players in the sector has diminished, with their share dropping from 44% in 2023 to 33% in 2024. Meanwhile, the engineering and manufacturing sector increased its footprint from 18% to 24%, supported by government initiatives like the PLI scheme and ‘Make in India’ campaign.
Rising Rentals and Future Outlook
Chennai emerged as the most expensive warehousing market, with rentals at ₹24.2/sq. ft./month, registering an 11% annual appreciation. Mumbai, in contrast, remained the most affordable at ₹18.1/sq. ft./month.
Vestian CEO Shrinivas Rao highlighted India’s strengthening position as a logistics hub, propelled by infrastructure developments and policy support. However, challenges such as skilled workforce shortages, regulatory hurdles, and land acquisition costs persist.
