Indian warehousing demand set to reach 1.2 billion sq ft by 2027
WAREHOUSING & LOGISTICS

Indian warehousing demand set to reach 1.2 billion sq ft by 2027

India’s logistics sector is undergoing a major transformation, with evolving supply chains projected to generate demand for 1.2 billion sq ft of warehousing space by 2027, according to a joint study by JLL India and Miebach Consulting. This demand will encompass Grade A, B, and C facilities across the country.

A notable shift towards high-quality infrastructure is driving the growth, with Grade A warehousing stock expected to increase from 290 million sq ft in 2023 to 400 million sq ft by 2027. E-commerce, third-party logistics (3PL), and omni-channel retail are emerging as primary drivers of this surge, especially in Tier I and increasingly in Tier II and III cities.

Warehouse absorption in Tier II and III markets saw a 41% rise from 11.6 million sq ft in 2022 to 16.4 million sq ft in 2023. This shift signals a growing emphasis on expanding logistics infrastructure beyond metro cities to meet rising regional demand.

"Urban fulfillment centers are playing a pivotal role, with an estimated additional 35 million sq ft required across India by 2027 to meet last-mile delivery needs," said Sanjay Bajaj, Senior Managing Director, Logistics & Industrial, India, JLL. He highlighted the sector's growing focus on Environmental, Social, and Governance (ESG) compliance and the National Logistics Policy, which aims to reduce logistics costs to 10% of GDP.

The rise of automation is another key trend shaping the sector. By 2026, India is expected to become one of the top six users of warehouse automation systems globally, with the market estimated to reach $2 billion annually. This reflects the industry’s efforts to enhance efficiency and competitiveness on the global stage.

Government initiatives, particularly the National Logistics Policy, are also streamlining operations and encouraging organised development in the warehousing sector. These policies are expected to attract further investments and foster a more standardized, 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, 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 becoming 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, signaling substantial untapped potential in emerging markets.

The expansion of warehouse nodes from Tier I to Tier II cities between 2014 and 2022 has dramatically improved delivery times in e-commerce, reducing them from 9 days to just 3 days. This efficiency boost highlights the tangible benefits of regional warehousing infrastructure development.

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 urban and regional markets.

(ET)

India’s logistics sector is undergoing a major transformation, with evolving supply chains projected to generate demand for 1.2 billion sq ft of warehousing space by 2027, according to a joint study by JLL India and Miebach Consulting. This demand will encompass Grade A, B, and C facilities across the country. A notable shift towards high-quality infrastructure is driving the growth, with Grade A warehousing stock expected to increase from 290 million sq ft in 2023 to 400 million sq ft by 2027. E-commerce, third-party logistics (3PL), and omni-channel retail are emerging as primary drivers of this surge, especially in Tier I and increasingly in Tier II and III cities. Warehouse absorption in Tier II and III markets saw a 41% rise from 11.6 million sq ft in 2022 to 16.4 million sq ft in 2023. This shift signals a growing emphasis on expanding logistics infrastructure beyond metro cities to meet rising regional demand. Urban fulfillment centers are playing a pivotal role, with an estimated additional 35 million sq ft required across India by 2027 to meet last-mile delivery needs, said Sanjay Bajaj, Senior Managing Director, Logistics & Industrial, India, JLL. He highlighted the sector's growing focus on Environmental, Social, and Governance (ESG) compliance and the National Logistics Policy, which aims to reduce logistics costs to 10% of GDP. The rise of automation is another key trend shaping the sector. By 2026, India is expected to become one of the top six users of warehouse automation systems globally, with the market estimated to reach $2 billion annually. This reflects the industry’s efforts to enhance efficiency and competitiveness on the global stage. Government initiatives, particularly the National Logistics Policy, are also streamlining operations and encouraging organised development in the warehousing sector. These policies are expected to attract further investments and foster a more standardized, 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, 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 becoming 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, signaling substantial untapped potential in emerging markets. The expansion of warehouse nodes from Tier I to Tier II cities between 2014 and 2022 has dramatically improved delivery times in e-commerce, reducing them from 9 days to just 3 days. This efficiency boost highlights the tangible benefits of regional warehousing infrastructure development. 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 urban and regional markets. (ET)

Next Story
Infrastructure Transport

Bengaluru-Chennai Expressway: 71-Km Stretch Opens for Toll-Free Travel

A 71-kilometer section of the Bengaluru-Chennai Expressway in Karnataka has been opened to the public, offering toll-free travel and significantly reducing travel time for commuters. Part of the larger 260-kilometer expressway connecting Bengaluru in Karnataka to Chennai in Tamil Nadu, this stretch has become a popular choice for recreational long drives. Once fully operational by August 2025, the expressway will cut travel time between Bengaluru and Chennai from six hours to just three, with a designed speed limit of 120 km/h. The project spans Karnataka, Andhra Pradesh, and Tamil Nadu, promi..

Next Story
Infrastructure Transport

DME Development Ltd Raises Rs 7.75 Billion via Green Bonds

DME Development Ltd (DMEDL), a wholly owned subsidiary of the National Highways Authority of India (NHAI), has raised Rs 7.75 billion through the first-ever issuance of Green Bonds in the roads and highways sector. The bonds aim to promote infrastructure development while ensuring environmental sustainability. NHAI Chairman Santosh Kumar Yadav expressed satisfaction with the response, stating, "This unique initiative sets a benchmark in the sector and encourages participation from diverse investors." Similarly, NHAI Member (Finance) and DMEDL Chairman NRVVMK Rajendra Kumar highlighted the str..

Next Story
Infrastructure Transport

Indore Assigns Rs 4.5 Billion for Road Development, Green Initiatives

The Indore Municipal Corporation (IMC) has approved Rs 4.5 billion for 23 road development projects aimed at improving urban infrastructure and promoting sustainable practices. The decision was taken during the mayor-in-council (MiC) meeting chaired by Mayor Pushyamitra Bhargava, alongside IMC Commissioner Shivam Verma and senior officials. The approved projects include the construction and widening of 23 major roads across the city, connecting key areas such as Bhagirathpura, Kila Maidan, and the airport. Additionally, 14 new roads aligned with Indore’s master plan were sanctioned, with de..

Hi There!

"Now get regular updates from CW Magazine on WhatsApp!

Join the CW WhatsApp channel for the latest news, industry events, expert insights, and project updates from the construction and infrastructure industry.

Click the link below to join"

+91 81086 03000