India’s Warehousing Demand Set to Hit 1.2 Billion Sq Ft by 2027

    Date:

    Share post:

    India’s logistics sector is undergoing a significant transformation, with projections indicating a demand for 1.2 billion square feet of warehousing space by 2027. This forecast, detailed in a joint study by JLL India and Miebach Consulting, encompasses Grade A, B, and C facilities across the nation.

    As published by the Construction World, a notable trend driving this growth is the shift towards high-quality infrastructure. The stock of Grade A warehousing is expected to rise from 290 million square feet in 2023 to 400 million square feet by 2027. Key contributors to this demand include e-commerce, third-party logistics (3PL), and omni-channel retail, particularly in Tier I cities and increasingly in Tier II and III cities.

    Warehouse absorption in Tier II and III markets increased by 41%, from 11.6 million square feet in 2022 to 16.4 million square feet in 2023. This rise indicates a growing emphasis on expanding logistics infrastructure beyond metropolitan areas to cater to regional demands.

    Urban fulfillment centers are expected to play a crucial role in this expansion, with an estimated 35 million square feet required across India by 2027 to address last-mile delivery needs, according to Sanjay Bajaj, Senior Managing Director of Logistics & Industrial at JLL India. He also noted the sector’s increasing focus on Environmental, Social, and Governance (ESG) compliance and the National Logistics Policy, which aims to reduce logistics costs to 10% of GDP.

    Automation is another key trend shaping the warehousing sector. By 2026, India is projected to rank among the top six global users of warehouse automation systems, with the market expected to reach $2 billion annually. This shift reflects the industry’s efforts to enhance efficiency and competitiveness on the global stage.

    Government initiatives, particularly the National Logistics Policy, are streamlining operations and encouraging organized development within the warehousing sector. These policies are expected to attract further investment and foster a more standardized and sustainable industry.

    “The warehousing industry has evolved from fragmented storage solutions into a critical component of companies’ go-to-market strategies,” said Shubhendu Kumar, Director at Miebach Consulting India. “Institutional players are increasingly entering the market, reflecting the demand for superior infrastructure and larger facilities.”

    Tier II and III cities are emerging as new growth hotspots, reshaping the logistics landscape. Despite these regions accounting for a significant share of consumer demand, most Grade A warehouse facilities remain concentrated in Tier I cities, indicating considerable untapped potential in these emerging markets.

    The expansion of warehouse nodes from Tier I to Tier II cities between 2014 and 2022 has significantly improved delivery times for e-commerce, reducing them from nine days to just three days. This efficiency boost underscores the tangible benefits of developing regional warehousing infrastructure.

    With India’s economic growth accelerating, the warehousing sector is poised to play a vital role in transforming supply chain dynamics, supporting the country’s ambitions, and reshaping logistics across both urban and regional markets.

    Related Posts

    Latest posts

    Brookfield India REIT Launches QIP

    Brookfield India Real Estate Trust (BIRET) has announced the launch of its Qualified Institutional Placement (QIP) to raise...

    Top Real Estate Firms Announce Joint Investment in Luxury Housing Project

    ASK Property Fund, KREEVA, the real estate arm of the Kanodia Group and Shapoorji Pallonji Real Estate have...

    The Future of Indian Real Estate: Key Real Estate Market Trends Shaping 2025

    Authored by - Mr. Avneesh Sood, Director Eros Group The Indian real estate sector stands on the brink of a...

    From Affordable to Premium: The Shift in India’s Residential Real Estate Market

    Authored by: Mr. Ravindra Gandhi, Managing Director of Tirasya Estates The Indian real estate market has witnessed significant transformations in...