Investments in India’s warehousing and logistics sector reached $1.96 billion in 2024, accounting for 29% of total institutional investment in the real estate sector, according to a report released on Thursday by Vestian.
The report highlighted a 203% year-on-year increase in investment inflows, driven by rising demand for warehouse space, particularly with the expansion of the quick commerce sector. Warehouse absorption reached a record 44.9 million square feet (sq ft) in 2024, marking a 19% increase from the previous year. The second half of 2024 saw 28.3 million sq ft of absorption, reflecting a 70% rise compared to the first half of the year, making it the highest absorption recorded in a single calendar year.
According to Vestian CEO Shrinivas Rao, India’s role as a logistics hub is expected to strengthen due to investor confidence, government policy announcements in the Union Budget 2025-26, and strong domestic demand. The government’s focus on large-scale infrastructure projects is also anticipated to contribute to sectoral growth.
The third-party logistics (3PL) segment accounted for 33% of the total warehouse absorption across India in 2024. The engineering and manufacturing sector’s share increased from 18% in 2023 to 24% in 2024, supported by government initiatives such as the production-linked incentive (PLI) scheme and the ‘Make in India’ campaign.
Among Indian cities, Mumbai reported the highest warehouse absorption, with 18.6 million sq ft in 2024, reflecting an 82% increase compared to the previous year. Pune recorded the highest growth rate among the top seven cities, with an 85% rise in absorption. Chennai, Hyderabad, and Kolkata collectively accounted for 15% of the total warehouse absorption in 2024, down from 22% in the previous year.
Factors contributing to the increased demand for warehousing space include improved intercity connectivity through the Navi Mumbai airport and the expansion of quick commerce in major metropolitan areas, according to the report.
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