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New Delhi, 20th March 2025: 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
