Institutional investment in India’s warehousing assets jumped from $645.8 million in 2023 to $1.96 billion last year due to high demand from e-commerce and third-party logistics (3PL) companies, according to real estate consultant Vestian.
3PL companies comprised 33 per cent of the total leasing of warehousing spaces across seven major cities, while engineering and manufacturing firms consisted of 24 per cent.
The government’s continued focus on mega infrastructure projects is expected to further propel growth in the warehousing and logistics sector. However, limited availability of skilled workforce, regulatory challenges, and land acquisition costs may pose a challenge. Weighted average rentals were in the range of Rs 18-25 per sq ft per month across the top seven cities—Delhi-National Capital Region (NCR), Mumbai, Pune, Chennai, Bengaluru, Hyderabad and Kolkata.
Chennai held the highest rentals of Rs 24.2 per sq ft monthly in 2024, registering an annual appreciation of 11 per cent. Limited availability of land within the city peripheries pushed the rentals northwards. Mumbai emerged as the most affordable warehousing market last year with Rs 18.1 per sq ft per month average rentals.
While average rentals depreciated by 3 per cent to Rs 22.9 per sq ft per month in Pune, rentals remained largely stable in Kolkata at Rs 20.7 per sq ft monthly. Moreover, average rentals in Bengaluru declined by 9 per cent in 2024 to Rs 19.3 per sq ft per month. Hyderabad reported a yearly decline of 5 per cent in rentals, whereas Delhi NCR saw a marginal decrease of 3 per cent over the previous year.
