The warehouse transactions across eight key Indian markets, including Pune and Chennai, reached 14.65 mn sq ft in Q3 2024 (July–September) Notably, 41 per cent of these transactions involved Grade A spaces. The manufacturing sector outperformed the 3PL sector in leasing volume, marking a significant shift, as 3PL has traditionally dominated the Indian warehousing market. Manufacturing industries accounted for 37 per cent of total transactions, leasing 14 mn sq ft from January–September 2024.

The market regained momentum in Q3 2024, with 14.65 mn sq ft transacted, reflecting a 20 per cent year-on-year (YoY) growth. Year-to-date (YTD) transaction volumes reached 37.54 mn sq ft in the first nine months of 2024, marking a 4 per cent YoY increase as occupiers steadily expanded their footprint, according to Knight Frank India’s report, ‘’India Warehousing Market Report – Q3 2024.’’

Manufacturing sector shines

The manufacturing sector continued to outpace the 3PL sector in transacted volumes compared to the same period last year, marking a significant shift given the 3PL sector’s traditional dominance in the Indian warehousing market. Manufacturing companies, particularly from the automotive, energy and chemicals industries, accounted for 37% of the total transacted volume during this period.

The growth reflects India’s advantage as a hub for decentralised manufacturing, with global giants like Apple, Samsung, Foxconn, Micron Technologyand TSMC expanding their presence. This is significant considering that the 3PL sector has traditionally anchored the Indian warehousing market, added the report.

The 3PL sector ranked second, contributing 31 per cent to the total volume. While its market share saw a slight decline, the absolute volume of 3PL transactions grew YoY, both in the quarter and during the January–September period, indicating continued demand.

Investments in the warehousing sector reached $1.5 bn in the first nine months of 2024, marking a significant increase from $0.68 bn in the corresponding period last year. Private equity investors remain highly engaged in the warehousing market with a strong focus on subsectors like 3PL and e-commerce facilities, both of which are projected to experience strong growth. This can be attributed to the bright economic outlook with the vast consumer market having become a battleground for businesses constantly striving to shorten supply chains for the increasingly demanding customer.

Pune tops in rentals

Pune emerged as the most expensive warehousing rental market among the eight cities analysed in the country, with an average rent of 26.9/sq ftmonth. Kolkata, Chennai, and Mumbai followed ₹Rs 23.9/sq ft/month each. Healthy rental growth across markets has been driven by limited supply in recent times. Pune also led in value appreciation, recording nearly 4 per cent YoY rental growth in Q3 2024, while Ahmedabad ranked second with a YoY growth of 3.50 per cent during the same period, the report said.

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