India's I&L Sector Soars with Record Leasing in 2024

India's Industrial and Logistics sector witnessed unprecedented growth in 2024, with a record leasing volume of 39.5 million square feet across top cities. Rising demand from 3PL, e-commerce, and FMCG sectors fueled this growth. Future projections highlight tier-II cities as emerging centers for warehousing expansion.

The Industrial and Logistics (I&L) sector in India reached new heights in 2024, with leasing volumes climbing to an unprecedented 39.5 million square feet across the top eight cities, a detailed report by CBRE South Asia Pvt. Ltd. reveals. The surge was accompanied by a robust supply addition of 38.6 million square feet, indicating a flourishing demand for space throughout the nation.

Delhi-NCR, Bengaluru, and Kolkata emerged as the forerunners in this leasing spree, responsible for nearly 60% of the total volume. These cities have cemented their status as key I&L hubs, thanks to the escalating demand from third-party logistics (3PL) services, e-commerce giants, and the fast-moving consumer goods (FMCG) sector. Notably, 3PL companies played a major role, occupying about 41% of the available space in 2024. Engineering and manufacturing firms followed closely, claiming an 18% share of the overall leasing activity.

Smaller lease deals, each under 50,000 square feet, dominated the market, accounting for 43% of all agreements, while medium and large transactions made up the remaining 28% each. A striking 17% year-on-year growth in leasing activity was observed in the second half of 2024, driven by renewed demand from e-commerce firms, quick-commerce services, and expansion initiatives by 3PL and FMCG companies. Furthermore, CBRE's forward-looking analysis suggests a vibrant leasing scenario in 2025, particularly in tier-II cities like Chandigarh, Hosur, Jaipur, Lucknow, and Vishakhapatnam, as businesses aim to broaden distribution networks and cut operational expenses.