India’s demand for storage space in eight key markets surged 12% year-on-year (YoY), reaching 56.4 million sq. ft. in 2024, from 50.3 million sq. ft. in 2023. Mumbai led the market with 10.3 million sq. ft. of transaction volumes, driven primarily by the 3PL (Third Party Logistics) sector, which accounted for 43% of the demand, according to property consultancy firm Knight Frank India.

The eight key markets include Mumbai, Delhi-NCR, Bengaluru, Chennai, Hyderabad, Pune, Kolkata and Ahmedabad.

The report noted that the Indian warehousing market has an additional capacity of building 233 million sq. ft., roughly four times the 2024 transaction volume, in the form of unutilised land.

The report revealed that Mumbai is leading the warehousing market with an 18% share of total transactions, amounting to 10.3 million sq. ft. in 2024. Close behind, Delhi-NCR emerged as the second largest market, accounting for 16% of total transactions, driven by the 3PL and manufacturing sectors at 38% and 24%, respectively.

Markets and rental trends

Bengaluru, Kolkata, Ahmedabad and Chennai recorded YY transaction growth between 25-29%, while Pune recorded the highest warehousing rent at ₹26.6 per sq ft per month. Rents in Mumbai and Kolkata increased by 4% each. Grade A properties dominated the market, accounting for 62% of total transactions.

“The markets of Bengaluru, Kolkata, Ahmedabad and Chennai experienced very healthy growth in transaction volumes ranging between 25-29% YoY,” it added.

In Chennai, Bengaluru and Ahmedabad, manufacturing giants are the key reason for growth. Meanwhile, Kolkata warehousing landscape was dominated by 3PL and e-commerce players, who took up significant part of the city’s occupier base with large-scale space acquisitions.

The manufacturing sector excluding (FMCG and FMCD) kept on gaining momentum and contributed for a significant 39% of total volumes with 22 million sq. ft. of warehousing transactions in 2024.

Highlighting the significance of the manufacturing sector, Shishir Baijal, Chairman & Managing Director, Knight Frank India said, "Occupier demand has remained strong in 2024, driven by the manufacturing sector’s continued expansion. Positive market momentum and rising average rents reflect occupiers’ ability to secure favourable terms while scaling operations. Despite challenges, India’s warehousing sector continues to attract significant institutional interest, reinforcing its position as a resilient and high-growth asset class. As the sector evolves and adapts, it offers significant growth potential, positioning India as a key player in the global logistics and warehousing landscape.”

The report emphasised that the warehousing industry experienced an investment boom in 2024, with PE inflows skyrocketing to $1,877 million, a massive increase of 136% from $684 million in 2023. “This growth highlights the growing interest in the warehousing segment, driven primarily by the robust expansion of manufacturing, 3PL and Ecommerce facilities, all of which are capitalising on the rise of online retail and supply chain optimisation.”

Warehousing demand is expanding beyond major cities into secondary markets, with translation volumes growing by 6% YoY to 11.4 million sq. ft. Lucknow, Ambala-Rajpura, and Surat led the charge, with Ambala-Rajpura and Surat seeing a whopping 98% growth each. 

“Along with Lucknow, these markets accounted for 45% of the total transacted area in secondary markets. The demand for Grade A properties strengthened, comprising 53% of the total transacted area, up from 43% in 2023,” it added.