New Delhi [India], January 30 : The Industrial and Logistics (I&L) sector in India experienced a record-breaking leasing volume in 2024, reaching an all-time high of 39.5 million square feet across the top eight cities, according to CBRE South Asia Pvt. Ltd.'s report.
The growth in leasing activity was accompanied by a strong supply addition of 38.6 million square feet throughout the year, signalling a robust demand for industrial and logistics space across the country.
Among the leading cities, Delhi-NCR, Bengaluru, and Kolkata dominated leasing activity, accounting for nearly 60 per cent of the total leasing volume. These cities have emerged as key hubs for I&L space, driven by rising demand from third-party logistics (3PL) providers, e-commerce companies, and fast-moving consumer goods (FMCG) players.
The report highlights that 3PL players were the largest contributors to leasing, occupying approximately 41 per cent of the total space in 2024. Engineering and manufacturing (E&M) firms also remained active, with an 18 per cent share in the overall leasing activity.
Smaller transactions under 50,000 square feet led the charge, making up around 43 per cent of the leasing volume, while medium and large transactions accounted for 28 per cent each.
Leasing activity in the second half of 2024 saw a 17 per cent year-on-year growth, with a total of approximately 23 million square feet leased. The surge was driven by a recovery in demand from e-commerce companies, a boost from quick-commerce operators, and expansion plans by 3PL and FMCG companies.
In H2 2024, 3PL firms maintained their dominant position, occupying around 42 per cent of the space leased, followed by E&M firms at 18 per cent.
Anshuman Magazine, Chairman & CEO of CBRE, stated, "The impressive growth in the industrial and logistics sector highlights its resilience, even amidst global economic uncertainties. Leasing activity remained strong across key cities in 2024."
CBRE's report also projects continued leasing activity in 2025, with strong demand expected in tier-II cities like Chandigarh, Hosur, Jaipur, Lucknow, and Vishakhapatnam, as occupiers seek to expand their distribution networks and reduce operational costs. These cities are set to become key focal points for warehousing growth in the coming year.
Ram Chandnani, Managing Director, Advisory & Transaction Services, CBRE India, said, "Acknowledging the opportunities in untapped tier-II markets, occupiers are increasingly focusing on establishing local distribution networks to enhance proximity to a larger population and optimise their operational costs."
In terms of supply, Chennai, Mumbai, and Bengaluru are anticipated to be the largest contributors, with over half of the new developments expected to be completed in these cities.