Mumbai Leads India’s Warehousing Market With 12% Rise in 2024

Mumbai has emerged as the leading warehousing market in 2024, with transaction volumes of 10.3 million square feet. The third-party logistics (3PL) sector was the main contributor, making up 43% of Mumbai’s total transactions. The data was released in a report by Knight Frank India on March 12.

Overall, India’s warehousing market has seen a strong rise in 2024, with total transaction volumes reaching 56.4 million square feet. This marked a 12% increase from 50.3 million square feet in 2023.

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The report highlighted potential for expansion. The markets studied have 233 million square feet of unused land. This is four times the current transaction volume. This land could provide for the warehousing needs in the future.

Despite an increase in average rents, rental growth was limited due to an 11.5% vacancy rate. Grade A spaces have dominated the market. They account for 62% of total transactions, or 34.71 million square feet.

Manufacturing was the biggest driver of demand. It accounted for 39% of total warehousing transactions, covering 22 million square feet. This represented an 18% rise in leased space from the previous year. The sector maintained strong momentum, except for the FMCG and FMCD industries.

Private equity investments in the sector surged in 2024. Total PE investments reached USD 1.88 billion, marking a 136% jump from USD 684 million in 2023. The rise in manufacturing, 3PL, and e-commerce facilities played a major role in this growth.

The demand for warehousing has remained strong due to manufacturing growth. The report also showed that this trend is expected to continue with increasing interest in logistics and storage.

The National Capital Region (NCR) was the second most active market, recording 16% of the total transaction volume. In NCR, manufacturing contributed 24%, while 3PL accounted for 38%. Warehousing transactions in Bengaluru, Kolkata, Ahmedabad, and Chennai increased between 25% and 29% year-over-year.