Industrial & Warehousing Sector Records Robust Growth in 2024, Driven by Large Deals and Strong Demand in Key Cities

India’s industrial and warehousing sector recorded significant growth in 2024, with 25.6 million sq ft of leasing activity across the top five cities. Delhi NCR and Chennai led the demand, accounting for nearly half of the market share. The sector saw a 22% YoY rise in new supply, reflecting developer confidence. Large-sized deals dominated, with 40% of the total demand driven by 3PL, Engineering, and Electronics segments.

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The industrial and warehousing sector in India witnessed healthy growth in 2024, with gross leasing activity reaching 25.6 million sq ft across the top five cities, marking a modest 2% year-on-year (YoY) increase. Large-sized deals, contributing 40% of the demand, played a pivotal role in sustaining the market momentum, despite a noticeable dip in leasing activity during the last quarter.

Key Highlights of 2024

Strong Demand with Regional Leaders
Delhi NCR led the demand with a 26% share, followed by Chennai with 23%. Together, these cities accounted for nearly half of the leasing activity during the year. On a quarterly basis, Q4 2024 recorded 5.5 million sq ft of gross leasing, with Pune and Bengaluru collectively driving over half of the quarterly demand.
Sector-Wise Space Uptake
The Third-Party Logistics (3PL) segment continued its dominance, accounting for 33% of Grade A space absorption in 2024. Meanwhile, the Engineering and Electronics sectors gained traction, contributing nearly one-third of the annual warehousing demand, up from one-fourth in 2023.
Growth in New Supply
Developers demonstrated increased confidence, as new supply surged 22% YoY to over 28 million sq ft in 2024, the highest annual addition in recent years. Delhi NCR alone contributed 35% of this supply, with close to 10 million sq ft of completions.
Rental Growth and Vacancy Levels
Rentals in key micro-markets rose by 5-10%, while overall vacancy levels remained stable at 13-14%, reflecting robust market fundamentals.

City-Wise Performance

Delhi NCR: The top performer with 6.6 million sq ft of leasing activity, led by large-sized deals.
Chennai: Witnessed an 18% YoY growth in demand, supported by 5.1 million sq ft of new supply.
Bengaluru: Leasing activity rose 27% YoY to 3.8 million sq ft, with a sharp 56% increase in Q4 demand.
Mumbai and Pune: Mumbai recorded a 16% decline in demand, while Pune saw a significant 27% drop in annual leasing.

Large Deals Lead the Market

Large deals (≥200,000 sq ft) dominated the market in 2024, with a total volume of 10.2 million sq ft, constituting 40% of overall leasing. 3PL players accounted for 35% of these large transactions, followed by the Engineering segment at 20%. The Electronics sector witnessed an impressive 4.5x growth in large deal volumes compared to 2023.

Notable Transactions in 2024

DHL leased 495,100 sq ft in Bhiwandi, Mumbai.
DMart secured 435,000 sq ft in Kulana, Delhi NCR.
Foxconn acquired 320,000 sq ft in Oragadam, Chennai.
Zomato leased 300,000 sq ft in Hoskote Narsapura, Bengaluru.

Market Outlook

“While 3PL players continued to dominate demand in 2024, the sector is witnessing diversification with increasing uptake from the Engineering, Electronics, FMCG, and Retail segments,” said Vijay Ganesh, Managing Director, Industrial & Logistics Services, Colliers India.

Chennai and Delhi NCR are expected to remain key growth engines, supported by strong market fundamentals, established industrial bases, and robust developer activity.

The rise in e-commerce, coupled with increased demand from fast-moving consumer goods (FMCG) and quick-commerce (Q-commerce) sectors, is anticipated to further drive long-term growth in warehousing demand across major urban centers.