The Indian logistics and warehousing space fetched $1.96 billion in funding in 2024, accounting for 29% of overall institutional investment in the real estate space during the year, as per a report published on Thursday.
The sector's investment witnessed an astonishing 203% rise on a year-on-year basis, driven by the skyrocketing need for warehouses, specifically due to the quick commerce sector's lightning-fast expansion.
This demand spurt led to a record absorption of 44.9 million square feet (sq ft) of warehousing space during 2024, a 19% rise over the year before.
Interestingly, the second half of 2024 witnessed an absorption of 28.3 million sq ft, a 70% rise over the first half of the year — the highest ever for a calendar year.
"India's stature as a prime logistics hub is poised to increase, aided by investor optimism, announcements in the Union Budget 2025-26, and robust domestic demand," stated Shrinivas Rao, FRICS, CEO at Vestian.
The government's continued emphasis on megascale infrastructure opportunities is likely to drive sectoral growth further.
Most of the 2024 absorption was in the third-party logistics (3PL) firms, which absorbed 33% of the pan-India absorption. The engineering and manufacturing industry also increased its share from 18% in 2023 to 24% in 2024, stimulated by government incentives like the production-linked incentive (PLI) scheme and the 'Make in India' drive.
Mumbai was the nation's top absorber, recording 18.6 million sq ft in 2024, up a whopping 82% from the previous year. This large increase in absorption was due to better intercity connectivity, especially with the establishment of Navi Mumbai airport, and the expansion of fast commerce in tier-1 major cities.
Pune recorded the biggest growth in absorption among the top seven cities, with an increase of 85%. Chennai, Hyderabad, and Kolkata collectively contributed 15% of the pan-India absorption in 2024, down from 22% in the previous year, said the report.
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