According to Vestian’s latest report, the warehousing & logistics (W&L) sector received investments worth USD 1.96 Bn, accounting for 29% of the total institutional investment garnered in the real estate sector in 2024. Investment inflows surged to 203% year-on-year, driven by the growing demand for warehouses amid the rapid expansion of the quick commerce sector.
Investment Trends
| Year | Investments (USD Mn) | % Share in Total investments |
| 2019 | 1,369.0 | 4% |
| 2020 | 847.0 | 14% |
| 2021 | 1,293.0 | 27% |
| 2022 | 1,856.0 | 31% |
| 2023 | 645.8 | 15% |
| 2024 | 1,957.4 | 29% |
Source: Vestian Research
As a result, this surge in demand resulted in a record absorption of 44.9 million sq. ft. in 2024, marking a 19% increase over the previous year. Notably, the second half of 2024 alone witnessed 28.3 million sq. ft. of absorption, a 70% jump compared to H1 2024—the highest ever recorded in a single calendar year.
Mr. Shrinivas Rao, FRICS, CEO, Vestian said, “India’s position as a key logistics hub is set to strengthen on the back of positive investor sentiments, announcements in the Union Budget 2025-26, and robust domestic demand. The government’s continued focus on mega infrastructure projects is expected to further propel growth in the W&L sector. However, limited availability of skilled workforce, regulatory challenges, and land acquisition costs may pose a challenge.”
| Yearly Absorption Trend | ||
| Year | Absorption (Mn sq ft) | Annual Change (%) |
| 2019 | 33.0 | – |
| 2020 | 21.0 | -36% |
| 2021 | 30.2 | 44% |
| 2022 | 31.2 | 3% |
| 2023 | 37.8 | 21% |
| 2024 | 44.9 | 19% |
Source: Vestian Research
Majority of the absorption in 2024 was concentrated in 3PL companies, accounting for 33% of the pan-India absorption. However, the share has dropped from 44% a year earlier. This shift underscores the increasing fragmentation of the warehousing market and a growing trend among large conglomerates to establish greater control over their logistics operations. Conversely, the share of engineering and manufacturing sector increased from 18% in 2023 to 24% in 2024, propelled by various government initiatives such as ‘Production Linked Incentive (PLI)’ scheme and ‘Make in India’ campaign.
Sector-wise Absorption
| Sectors | 2024 | 2023 |
| 3PL | 33% | 44% |
| Engineering & Manufacturing | 24% | 18% |
| Consumer Goods & Services | 7% | 6% |
Source: Vestian Research
City-wise Analysis
· Mumbai reported the highest absorption of 18.6 Mn sq ft in 2024 as it grew by 82% compared to the previous year. The significant rise in absorption could be attributed to improved intercity connectivity through Navi Mumbai airport and the rise of quick commerce in major tier-1 cities.
· Pune’s absorption increased by 85%, the highest rise amongst the top seven cities, reporting 13 Mn sq ft absorption in 2024. Average rentals depreciated by 3% in the city to INR 22.9/sq ft/month.
· Chennai, Hyderabad, and Kolkata accounted for 15% of the pan-India absorption during 2024, indicating a decline from 22% a year ago.
· NCR registered the highest decline of 55% in absorption among the top seven cities in 2024. As a result, the share of NCR in the pan-India absorption declined from 23% in 2023 to a mere 9% in 2024.
· Chennai holds the highest rentals of INR 24.2/sq ft/month in 2024, registering an annual appreciation of 11%. Limited availability of land within the city peripheries pushed the rentals northwards.
· Mumbai has emerged as the most affordable warehousing market in 2024 with an average rental of INR 18.1/sq ft/month.
City-wise Share in Absorption
| City | 2024 | 2023 |
| Bengaluru | 6% | 10% |
| Chennai | 6% | 9% |
| Hyderabad | 7% | 8% |
| Pune | 29% | 19% |
| Mumbai | 41% | 27% |
| Kolkata | 2% | 4% |
| NCR | 9% | 23% |
Source: Vestian Research
About Vestian:
Vestian is an occupier-focused workplace solutions firm specializing in commercial, residential, industrial, retail and hospitality sectors. Headquartered at Chicago, Vestian has offices across US, India, China, UK, Sri Lanka and the Middle East. Our core strength lies in providing customized innovative solutions that are aligned to the client’s business objectives. Our extensive service portfolio includes Investment & Consultancy Services, Transaction Advisory Services, Project Services, Retail Business Solutions and Integrated Facilities Management Services. Vestian is the only global workplace solutions organization to be certified in both quality management systems and environmental health & safety standards such as ISO 9001, ISO 14001, ISO 45001 and ISO 37001. For further information on the company, you can visit us at www.vestian.com
