India’s Industrial and Warehousing Sector Witnesses Strong Growth with Increased Demand
Rise in Leased Space Reflects Consistent Demand
India’s industrial and warehousing sector has experienced remarkable growth, with a staggering 17 percent increase in leased space, totaling approximately 20 million square feet in the first nine months of 2024. This surge indicates a consistent and robust demand for industrial and warehousing space, according to a report released by Colliers.
The report highlights that the average quarterly space uptake has risen from 5.7 million square feet in 2021 to 6.7 million square feet in 2024, painting a positive picture for the industry.
National Capital Region and Chennai Lead in Leasing Activity
Delhi NCR (National Capital Region) and Chennai have emerged as the top contributors, accounting for 53 percent of the total leasing activity in the industrial and warehousing sector. These regions have played a significant role in driving the growth of the industry.
Third-Party Logistics Firms Drive Demand
Third-party logistics (3PL) companies have remained dominant players in the market, contributing to 35 percent of the overall leasing demand. Additionally, an increasing level of interest has been noted from the Engineering and FMCG (Fast-Moving Consumer Goods) sectors, signifying their active participation in the market.
Micro-Markets Fuel Demand for Warehousing
Within the larger market, certain micro-markets have experienced significant demand for warehousing. Bhiwandi in Mumbai recorded a remarkable 3.7 million square feet of leasing activity in 2024, with Oragadam in Chennai and Chakan-Talegaon in Pune surpassing 2.0 million square feet of demand, showcasing the need for warehousing facilities in these areas.
Positive Outlook for Industrial and Warehousing Demand
Vijay Ganesh, Managing Director of Industrial & Logistics Services at Colliers India, expressed optimism about the future of the industry. He noted that the third quarter of 2024 witnessed a growth of 18 percent in industrial and warehousing demand. Delhi NCR continued to lead in quarterly demand, leasing approximately 2.3 million square feet. Ganesh attributed this increase to the upsurge in demand for industrial and warehousing space in the Bhaproda and Kulana micro-markets.
3PL Providers Remain Key Players
3PL providers maintained their dominant position in the market, holding a significant share of approximately 35 percent of overall leasing activity. Engineering and FMCG sectors jointly accounted for 32 percent of the industry’s total demand in 2024. The report highlights that there are positive expectations for continued strong uptake in industrial and warehousing spaces from these segments.
Future Demand for Sustainable and Technologically Advanced Spaces
As the demand for Grade A spaces equipped with sustainable and advanced technology features increases, professionals anticipate that the leasing momentum from firms engaged in sectors like logistics and engineering will persist over the next few years. This signals a growing appetite for high-quality facilities equipped with the latest technological advancements.
In conclusion, India’s industrial and warehousing sector is experiencing substantial growth, supported by consistent demand and increased leasing activity. Delhi NCR and Chennai have emerged as key players in the market, while micro-markets in cities like Mumbai and Pune also contribute significantly to demand. With the continued dominance of 3PL firms and positive expectations for the engagement of the Engineering and FMCG sectors, the future outlook for the industry appears promising. Moreover, the demand for technologically advanced and sustainable spaces is likely to shape the industry’s growth potential in the coming years.
