India's warehousing stock surges to 533 mn. sq. ft. on policy support, e-comm boom

India's warehousing sector has seen robust growth in market size in the past five years, with the total stock reaching 533 million sq.ft in CY 2024, up from 300 million sq. ft. in CY 2019, according to the latest 'Real Estate Sector Trends' report by Equirus. The sector has received a boost from government schemes like GST, Gati Shakti, dedicated freight corridors (DFCs), and Urban Infrastructure Development Fund (UIDF), helping in warehousing expansion and connectivity.

The warehousing demand is rapidly expanding beyond Tier 1 hubs, and there has also been rise in economic activity associated with the warehousing sector in Tier 2 and 3 cities, driven by 60% of e-commerce demand coming from smaller cities. "Tier 2–3 cities contribute ~95 Mn sq.ft. (18%) of total stock — a 4X increase since 2017," says the report.

Also, a shift is being seen toward Grade A warehousing infrastructure, with the Grade A share in new absorption at 80% in 2024 across the top 8 Tier 1 cities. In the emerging cities, Grade A constitutes around 30% of stock, reflecting occupier shift toward quality.

Among sectoral demand drivers, 3PL/logistics remains the largest segment, while manufacturing-driven warehousing demand rose from less than 20% pre-COVID to more than 25% in 2024. Post-COVID, e-commerce and quick commerce have revived demand for mid-mile and last-mile warehouses, says the report.

Among key developments in the warehousing sector, Tesla last month expanded its India footprint with a 24,000 sq ft warehousing lease at Lodha Logistics Park in Kurla (West), Mumbai, for a monthly rent of ₹37.5 lakh, marking its second major real estate deal in the city.

India’s warehousing sector is undergoing a strategic transformation, driven by policy support, robust demand from 3PL, manufacturing, and e-commerce, and rising private equity and InvIT investments. In luxury home sales, Gurugram has overtaken Mumbai by value in 2024, with ₹79,000 crore worth sold versus Mumbai’s ₹29,000 crore, according to PropEquity.