India’s warehousing and logistics boom: Global and domestic giants battle for dominance

The warehousing and logistics sector in India has become the hot spot amongst the  major global players and private equity giants. In 2023, India’s Industrial and warehousing lease transactions reached a record of 39 million square feet across eight key cities, marking an eight per cent increase from the previous year, according to CBRE South Asia. The total supply of industrial and logistics space also hit a peak at 36 million square feet. Private equity investments in the segment more than doubled, reaching around $900 million, the second-highest after the office segment. 

Notable deals included Blackstone acquiring assets of TransIndia Real Estate for $79 million, Morgan Stanley investing $36 million in Prakhyat Group’s warehousing project near Mumbai, and IndoSpace purchasing an Amazon fulfillment center in Hyderabad from the GMR group for $23 million.

US-based private equity giant Blackstone, Asia Pacific’s largest real estate asset manager ESR group, and Singapore-based CapitaLand are among the global entities investing in the establishment and development of integrated industrial and logistics parks. Domestically, Everstone-backed IndoSpace, Mumbai-based Lodha group, and the southern-based TVS group are significant players, already owning vast warehousing space and investing billions to create integrated parks serving as manufacturing, storage, and distribution centers.

Blackstone’s Horizon Industrial Parks encompasses 17 facilities in eight cities, spanning 1,000 acres, with a development potential of 25 million square feet. ESR India, a joint venture between ESR group and Allianz Real Estate, operates in 10 cities with 21 ongoing projects covering 22 million square feet. IndoSpace, a major domestic player, manages 51 parks across 11 cities with a total of 58 million square feet. Macrotech Developers (Lodha group) collaborates with Ivanhoé Cambridge and Bain Capital, investing approximately $1 billion to establish Lodha Industrial and Logistics Park, aiming for 30 million square feet of assets.

The demand for warehousing space is fueled by third-party logistics players, constituting 45 percent of leases. 

CBRE notes a shift to more structured operational models in sectors like retail, FMCG, and manufacturing, driving the need for efficient last-mile delivery solutions. Sectors, including e-commerce, retail, and manufacturing, outsource supply chain operations to 3PL firms for storage, flexibility, and cost reduction.

Government initiatives like Multi-Modal Logistics Parks, electric mobility, giga factories, and the rise of quick commerce are expected to drive warehouse growth in the near and medium term. With consolidation in the sector anticipated, institutionalization is on the horizon, opening doors for new technologies and Real Estate Investment Trusts (REITs), as highlighted by Colliers.

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