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Led by Pune , manufacturing sector drove transaction volumes and rents across markets as occupiers expanded their footprint..
According to Knight Frank India warehouse transactions across eight key Indian markets reached 14.65 million square feet (mn sq ft) in Q3 2024 (July–September). Notably, 41% 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% 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% 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% YoY increase as occupiers steadily expanded their footprint.
Transaction volumes were well distributed across markets, with Pune leading at 23% of the total warehousing volume, driven predominantly by the 3PL sector. NCR followed, contributing 13% to the total transacted area, with significant activity from the 3PL and manufacturing sectors.
TRANSACTIONS DURING 2024 (Area in mn sq ft)
| Q3 2024 | YoY % change | YTD Q3 2024 | YoY % change | |
| Pune | 3.4 | 17% | 6.3 | 9% |
| NCR | 2.0 | 59% | 5.9 | 12% |
| Mumbai | 1.1 | -21% | 5.7 | -10% |
| Kolkata | 2.1 | 122% | 4.9 | 55% |
| Ahmedabad | 1.4 | 129% | 4.7 | 38% |
| Chennai | 2.2 | 60% | 3.9 | 21% |
| Bangalore | 1.6 | -11% | 3.7 | -18% |
| Hyderabad | 0.9 | -55% | 2.4 | -44% |
| Grand Total | 14.6 | 20% | 37.5 | 4% |
Source: Knight Frank India
Warehousing Rents:
Pune emerged as the most expensive warehousing rental market among the eight cities analysed in the country, with an average rent of INR 26.9/sq ft/month. Kolkata, Chennai, and Mumbai followed at INR 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% YoY rental growth in Q3 2024, while Ahmedabad ranked second with a YoY growth of 3.50% during the same period.
Average rent (in INR/sq ft/month)
| Market | Q3 2023 | Q3 2024 | % Change |
| Pune | 25.9 | 26.9 | 4% |
| Ahmedabad | 17.5 | 18.1 | 4% |
| NCR | 20.5 | 21.1 | 3% |
| Chennai | 23.3 | 23.9 | 3% |
| Mumbai | 23.4 | 23.9 | 2% |
| Bangalore | 21.8 | 22.1 | 2% |
| Kolkata | 23.6 | 23.9 | 1% |
| Hyderabad | 20.4 | 20.6 | 1% |
Source: Knight Frank India
“Robust investments and a resilient Indian economy have sustained corporate confidence, driving consistent activity in the warehousing sector. Anchored by the manufacturing and 3PL sectors, the market continues to thrive, with strong private equity interest catalysing the adoption of advanced processes and the development of high-quality facilities”,says Shishir Baijal, Chairman & Managing Director, Knight Frank India.
INDUSTRY-WISE TRANSACTIONS:
Manufacturing sector leads:
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. This growth reflects India’s advantage as a hub for decentralised manufacturing, with global giants like Apple, Samsung, Foxconn, Micron Technology, and TSMC expanding their presence. This is significant considering that the 3PL sector has traditionally anchored the Indian warehousing market.
The 3PL sector ranked second, contributing 31% to the total volume. While its market share saw a slight decline, the absolute volume of 3PL transactions grew year-on-year, both in the quarter and during the January–September period, indicating continued demand.
The retail and e-commerce occupiers have been particularly active so far in 2024 with volumes transacted increasing by 35% and 34% YoY, respectively. While still much smaller than their counterparts, their market shares have grown to 11% and 9% respectively and signal the continuing broad-basing of the warehousing market’s occupier base.
Industry-split of transaction volume
| Sector | YTD Q3 2024 in mn sq ft | YoY % change |
| Other Manufacturing | 14.0 | -4% |
| 3PL | 11.5 | 1% |
| Retail | 4.1 | 35% |
| E-commerce | 3.3 | 34% |
| FMCD | 1.9 | 15% |
| Miscellaneous | 1.4 | -18% |
| FMCG | 1.3 | 23% |
| Total | 37.5 | 4% |
Source: Knight Frank India
Stock and Vacancy:
The top eight warehousing markets in India hold a warehousing stock of 479 mn sq ft-. Mumbai is by far the largest market constituting 31% of the total stock with the NCR being a distant second at 21%. Healthy transaction volumes, in tandem with comparatively lower supply in recent times, have kept vacancy levels at a healthy 10.3% in Q3 2024. The Bengaluru market has the highest vacancy level at 18.9% followed by Hyderabad and the NCR at 14.6% and 14.5% respectively.
