The Indian warehousing and logistics sector has attracted a significant investment of $1.96 billion in 2024, accounting for 29% of the total institutional investment in the real estate sector.
This surge in investments highlights the growing demand for logistics infrastructure, driven by the rapid expansion of the quick commerce industry.
Record Growth In Investments And Absorption
According to a report by Vestian, investment inflows into the warehousing and logistics sector surged by 203% year-on-year.
The increasing demand for warehouse space fueled this growth, largely driven by the rise of quick commerce, which reshaped consumer expectations and delivery timelines.
As a result of this demand, the sector recorded a record absorption of 44.9 million square feet (sq ft) of warehouse space in 2024.
This marks a 19% increase over the previous year, reflecting the sector’s robust growth.
Notably, the second half of 2024 alone accounted for 28.3 million sq ft of absorption, a 70% increase compared to the first half of the year, making it the highest-ever recorded in a single calendar year.
Shrinivas Rao, CEO of Vestian, stated that favorable investor sentiments, government announcements in the Union Budget 2025-26, and strong domestic demand for logistics services will strengthen India’s position as a key logistics hub.
The government’s focus on mega infrastructure projects, he said, will further propel the sector’s growth.
Dominance Of Third-party Logistics And Manufacturing Sectors
The majority of the absorption in 2024 came from third-party logistics (3PL) companies, which accounted for 33% of the total pan-India absorption.
The manufacturing and engineering sectors also saw a significant uptick in demand, with their share increasing from 18% in 2023 to 24% in 2024.
This rise can be attributed to government initiatives such as the Production-Linked Incentive (PLI) scheme and the ‘Make in India’ campaign, which have stimulated growth in the manufacturing sector.
Key Cities Drive Demand: Mumbai Leads Investments & Absorption
Among the top cities, Mumbai reported the highest absorption in 2024, with 18.6 million sq ft of warehouse space taken up, reflecting an 82% increase over the previous year.
This increase can be attributed to improved intercity connectivity, particularly with the upcoming Navi Mumbai airport, and the rapid rise of quick commerce in major tier-1 cities.
Pune saw the highest growth in absorption among the top seven cities, with an 85% rise compared to 2023.
Meanwhile, Chennai, Hyderabad, and Kolkata accounted for 15% of the total pan-India absorption in 2024, showing a decline from 22% in the previous year.
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