3PL, manufacturing sectors drives high warehouse demand in India

15 Jun 2023 CW Team

Knight Frank, a property consultancy, published the India Warehousing Market Report – 2023, which attributed the surge in demand primarily to the third-party logistics (3PL), manufacturing, and retail sectors. Among these, the 3PL sector observed the highest rise in demand, marking a 34 per cent increase from the previous year. The manufacturing sector also saw significant growth, with a 23 per cent year-on-year (YoY) increase.

However, the e-commerce sector faced a decline in demand during FY23. This was mainly due to the capacity built in previous years to accommodate the surge in consumption during the pandemic, as well as a gradual shift towards flexibility. The report stated that the volume of transactions in the e-commerce sector experienced a 71 per cent YoY decline in FY23. However, this decline is expected to be temporary, as secondary activity is likely to revive once the excess capacity is utilised in the coming year.

The report highlighted that India has benefited from the ongoing trend of companies decentralising their manufacturing capacity from China. Apple, for example, now manufactures seven per cent of its iPhones in India, a significant increase from the meager one per cent in 2021. The report credited the government's "Make in India" initiative and the production-linked incentive (PLI) scheme for boosting the prospects of the manufacturing industry in the country.

While Mumbai and the National Capital Region (NCR) led the market in terms of overall transaction volumes in FY23, Bengaluru and Kolkata witnessed the highest growth in annual transacted volumes, with a 25 per cent and 18 per cent YoY increase, respectively. The growth in the warehousing market is not limited to the top eight cities but has extended to secondary markets as well, supported by improved infrastructure such as highways, railways, and air transportation. The report emphasised the emerging importance of 3PL providers and manufacturing companies as primary players in the industry.

However, the report also noted that inflation in the cement and steel sectors has led to an increase in warehouse rents. During FY23, the top eight cities in India experienced a rise in warehouse rent ranging from three to eight per cent, with Bengaluru witnessing the highest increase of eight per cent. NCR followed with a seven per cent rise, while Ahmedabad saw a five per cent increase.

A report revealed that the demand for warehouses in the top eight cities in India reached an unprecedented level of 51.3 million square feet (MSF) in the fiscal year 2022-23 (FY23). Mumbai, Bengaluru, and Kolkata witnessed an all-time high in demand. Overall, the country experienced a 24 per cent increase in demand compared to FY22.Knight Frank, a property consultancy, published the India Warehousing Market Report – 2023, which attributed the surge in demand primarily to the third-party logistics (3PL), manufacturing, and retail sectors. Among these, the 3PL sector observed the highest rise in demand, marking a 34 per cent increase from the previous year. The manufacturing sector also saw significant growth, with a 23 per cent year-on-year (YoY) increase.However, the e-commerce sector faced a decline in demand during FY23. This was mainly due to the capacity built in previous years to accommodate the surge in consumption during the pandemic, as well as a gradual shift towards flexibility. The report stated that the volume of transactions in the e-commerce sector experienced a 71 per cent YoY decline in FY23. However, this decline is expected to be temporary, as secondary activity is likely to revive once the excess capacity is utilised in the coming year.The report highlighted that India has benefited from the ongoing trend of companies decentralising their manufacturing capacity from China. Apple, for example, now manufactures seven per cent of its iPhones in India, a significant increase from the meager one per cent in 2021. The report credited the government's Make in India initiative and the production-linked incentive (PLI) scheme for boosting the prospects of the manufacturing industry in the country.While Mumbai and the National Capital Region (NCR) led the market in terms of overall transaction volumes in FY23, Bengaluru and Kolkata witnessed the highest growth in annual transacted volumes, with a 25 per cent and 18 per cent YoY increase, respectively. The growth in the warehousing market is not limited to the top eight cities but has extended to secondary markets as well, supported by improved infrastructure such as highways, railways, and air transportation. The report emphasised the emerging importance of 3PL providers and manufacturing companies as primary players in the industry.However, the report also noted that inflation in the cement and steel sectors has led to an increase in warehouse rents. During FY23, the top eight cities in India experienced a rise in warehouse rent ranging from three to eight per cent, with Bengaluru witnessing the highest increase of eight per cent. NCR followed with a seven per cent rise, while Ahmedabad saw a five per cent increase.

Infrastructure Urban

02 Jun 2026

VECV Sales Rise 7.8 Per Cent In May 2026

VE Commercial Vehicles recorded sales of 7,978 units in May 2026, compared to 7,401 units in May 2025, registering growth of 7.8 per cent. This included 7,789 units from the Eicher brand and 189 units from the Volvo brand.Eicher branded trucks and buses reported sales of 7,789 units during the month, up 7.3 per cent from 7,258 units a year earlier. In the domestic commercial vehicle market, Eicher sales rose 9.1 per cent to 7,375 units from 6,758 units in May 2025.Exports declined 17.2 per cent to 414 units from 500 units in the corresponding month last year. Volvo Trucks and Volvo Buses recor..

Infrastructure Urban

02 Jun 2026

Table Space Strengthens DESYN Leadership Team

Table Space has announced strategic leadership appointments within DESYN, its integrated Design and Build business, as it looks to strengthen operations across key enterprise and GCC markets in India. DESYN was launched as a strategic extension of Table Space’s workspace solutions portfolio to meet rising demand for agile, high-quality and rapidly deployable enterprise workspaces.Shruti Ookabhoy has joined DESYN as Executive Director and will lead the Design vertical, focusing on design capability, operational excellence and team development across markets. She brings over 22 years of experi..

Infrastructure Transport

02 Jun 2026

Concord Associate Bags Rs 2.79 Bn Kavach Order

Concord Control Systems said its associate company, Progota India, has received a Rs 2.79 bn domestic order from Indian Railways for the supply, installation, testing and commissioning of on-board Kavach 4.0 loco equipment.The order is scheduled for execution within 12 months and strengthens Concord’s role in India’s railway safety and signalling ecosystem. Kavach is India’s indigenous automatic train protection system, designed to improve operational safety by helping prevent signal passing at danger and reducing collision risks.Gaurav Lath, Joint Managing Director, Concord Control Syst..