The industrial and warehousing sector in India has experienced remarkable growth in 2024, with a total leasing of 20.2 million sq ft recorded from January to September, according to a report by Colliers India. This figure represents a 17% increase year-on-year, underscoring the sustained momentum in the sector across the country’s top five cities. Notably, the quarterly average space uptake has grown from 5.7 million sq ft in 2021 to 6.7 million sq ft in 2024, highlighting a consistent rise in demand.
Among the leading regions, Delhi NCR and Chennai emerged as the frontrunners, collectively accounting for 53% of the total leasing activity during the first nine months of 2024. Third-Party Logistics (3PL) players continued to dominate demand, holding a significant 35% share of the overall leasing. The Engineering and Fast-Moving Consumer Goods (FMCG) sectors also contributed meaningfully to this upward trend. At a micro market level, Bhiwandi in Mumbai recorded the highest activity with 3.7 million sq ft leased in 2024, followed closely by Oragadam in Chennai and Chakan-Talegaon in Pune, both of which saw leasing exceed 2 million sq ft.
In the third quarter of 2024 alone, the industrial and warehousing demand reached an impressive 7.3 million sq ft, marking an 18% increase compared to the same period in 2023. Delhi NCR led this surge with 2.3 million sq ft of space leased, primarily driven by significant demand in the Bhaproda and Kulana micro markets. Commenting on this trend, Vijay Ganesh, Managing Director of Industrial & Logistics Services at Colliers India, stated, “On a quarterly basis, Q3 2024 saw an increase in industrial and warehousing demand across the top five cities, indicating a robust recovery in the sector. The large uptake of space in micro markets reflects the growing need for efficient logistics solutions.”
The report also revealed that while 3PL players maintained their dominant position with 35% of the leasing share during January to September, the Engineering and FMCG sectors collectively accounted for 32% of the demand. The electronics sector, in particular, witnessed heightened traction, doubling its leasing activity in the first three quarters of 2024 compared to the corresponding period in 2023. The rise of quick commerce (Q-commerce) players has further catalysed the demand for larger hub warehouses in major urban centres, especially in anticipation of the festive season.
Vimal Nadar, Senior Director and Head of Research at Colliers India, emphasized the positive outlook for the sector, saying, “Given the healthy demand across major cities and supportive government policies, we anticipate 2024 could close with record leasing activity of around 25 to 30 million sq ft. The improving logistics efficiencies, capacity augmentation, and India’s enhanced credibility as a global manufacturing hub will sustain the growth momentum in the industrial and warehousing sector.”
In terms of supply, the first three quarters of 2024 saw a significant 29% year-on-year increase, with 21.6 million sq ft of new developments coming online. Delhi NCR again led the pack, contributing 35% of the overall completions with 7.6 million sq ft of new space. Even on a quarterly basis, new supply remained robust in Q3 2024, with around 7.2 million sq ft of completions across the top five cities. Amidst favorable demand-supply dynamics, overall vacancy levels at the end of Q3 2024 remained stable at around 12-13%, indicating a healthy balance in the market.
Moreover, large deals (greater than 200,000 sq ft) accounted for approximately 40% of the overall demand during the first nine months of 2024. While the majority of these larger deals were dominated by 3PL players, both the Engineering and FMCG sectors also participated significantly in the larger-sized deals. At the city level, the industrial and warehousing space uptake in Delhi NCR was notably driven by large-sized deals, a marked departure from 2023, where leasing activity was predominantly composed of smaller transactions. In fact, nearly 50% of the deals in the first nine months of 2024 were large-sized in Delhi NCR, illustrating a shift in market dynamics.
