The demand for Grade A warehousing in India is set to grow significantly, driven by the retail, e-commerce, and third-party logistics (3PL) sectors. According to a recent analysis by Alvarez & Marsal India, a global professional services firm, this demand is expected to post a compound annual growth rate (CAGR) of 12.5% until FY30, reflecting a strong appetite for high-quality warehousing solutions.
Over the next five years, these three sectors are projected to account for 80% of the total Grade A warehousing demand, with absorption expected to reach 410 million square feet (msf) by FY30. As of now, 70% of this demand is concentrated in major cities such as Delhi-NCR, Mumbai, Bengaluru, Chennai, and Pune, where newer, well-located properties with advanced amenities are in high demand.
Manish Saigal, Managing Director and Business Transformation Services Practice Co-Leader at Alvarez & Marsal India, emphasized the evolution of warehousing in India. He noted that the shift from traditional ‘godowns’ to sophisticated logistics hubs marks a new era of efficiency and resilience in supply chain management. Saigal highlighted that the absorption of Grade A warehouses in FY24 stood at 202 msf and is expected to double by FY30 to 410 msf.
The report also predicts substantial growth across the key sectors driving this demand. E-commerce is anticipated to grow by 20-25%, 3PL by 11-12%, and modern retail by 6-7% over the next five years. This robust growth underscores the critical role of Grade A warehousing in supporting the expanding needs of India’s dynamic retail and logistics sectors.