The industrial and warehousing sector in India has witnessed significant growth, with around 20 million square feet of space leased in the first nine months of 2024, reflecting a 17 per cent increase compared to the previous year across the top five cities.
Colliers reported that the average quarterly space uptake rose from 5.7 million square feet in 2021 to 6.7 million square feet in 2024, indicating consistent and robust demand for industrial and warehousing space.
In the initial three quarters of the year, Delhi NCR and Chennai together accounted for 53 per cent of the total leasing activity. Third-party logistics (3PL) companies remained the dominant players in the market, contributing to 35 per cent of the overall leasing demand, with significant interest also seen from the Engineering and FMCG sectors. At a micro-market level, Bhiwandi in Mumbai recorded 3.7 million square feet of leasing activity in 2024, followed by Oragadam in Chennai and Chakan-Talegaon in Pune, each surpassing 2.0 million square feet of demand, thereby driving warehousing needs in their respective areas.
Vijay Ganesh, Managing Director of Industrial & Logistics Services at Colliers India, noted that the third quarter of 2024 saw approximately 7.3 million square feet of industrial and warehousing demand across the top five cities, marking an 18% year-on-year increase. He explained that with 2.3 million square feet leased, Delhi NCR continued to lead in quarterly demand, primarily due to a substantial uptake of industrial and warehousing space in the Bhaproda and Kulana micro-markets. Ganesh added that 3PL firms were responsible for the majority of quarterly demand, particularly in Mumbai and Chennai. He highlighted that engineering firms represented about 26 per cent of the overall demand in the third quarter, with significant space uptake in Chennai and Delhi NCR. He also mentioned that as the demand for quality Grade A spaces equipped with sustainable and technologically advanced features rises, the leasing momentum by such firms is likely to persist over the next few years.
The report underscores that 3PL providers retained a dominant position in the market from January to September 2024, holding an approximate 35 per cent share of overall leasing. It was noted that players from the Engineering and FMCG segments made significant contributions to space uptake, collectively accounting for 32 per cent of industrial and warehousing demand in 2024. Furthermore, there are optimistic expectations for continued strong uptake of industrial and warehousing spaces from these segments.
