India’s 3PL sector records 110 million sq. ft of gross absorption since 2021 making it the largest segment of occupier in India

MUMBAI, 19 AUGUST 2026 – India’s Third-Party Logistics (3PL) sector has established itself as the warehousing market’s dominant occupier segment, recording cumulative gross absorption exceeding 110 million sq. ft between 2021 and H1 2026, according to JLL report titled ‘Beyond the Box: The Future of Real Estate of India's Leading 3PL Players.’

The sector maintained consistent absorption shares ranging between 28% and 42% throughout this period, demonstrating sustained momentum despite broader economic fluctuations.

“India's 3PL sector consistently captures the highest share of gross warehousing demand, thus establishing itself as one of the market's most consistent growth engines. The 25% expansion in average deal sizes from 100,000 sq. ft in 2021 to 125,000 sq. ft in 2025 is not just about scale; it signals a long-term trajectory of growth and appetite for future-ready infrastructure. This is about India's manufacturing and logistics sector becoming globally competitive through strategic infrastructure investment that supports automation, sustainability, and technology integration,” said Yogesh Shevade, Managing Director, Industrial & Logistics, India, JLL.

There is a pronounced shift toward institutional-grade warehousing infrastructure that reflects the systematic prioritization of operational efficiency and modern specifications supporting technology integration and automation readiness. Presently, most customers tend to offer shorter contractual terms of engagement but expect heavy investments in technology and operations from 3PL players. This doesn't present an ideal scenario and likely stands in the way of higher technology penetration.

Average deal sizes across the 3PL sector grew 25% from 100,000 sq. ft in 2021 to 125,000 sq. ft in 2025. For Grade A facilities specifically, average transaction sizes reached 145,000 sq. ft in 2025. This expansion in transaction scale indicates network consolidation strategies and longer-term commitments to quality infrastructure, with larger footprints enabling centralized operations and improved inventory management across expanded service territories.

The rental analysis reveals divergent growth patterns between facility grades. Overall 3PL facility rents increased at 3.9% Compound Annual Growth Rate (CAGR) from 2021 to 2025, reaching INR 21 per sq. foot. Grade A facilities demonstrated stronger appreciation at 4.9% CAGR, reaching INR 23 per square foot in 2025. There is a mismatch of market rentals vs occupier expectations on rentals for 3PLs. An equilibrium is much needed.

The rental premium for Grade A facilities accelerated notably in H1 2026, rising to INR 23.7 per square foot—a 7.7% year-on-year increase that outpaced overall market growth. This widening differential underscores occupiers' willingness to absorb higher costs in exchange for enhanced operational capabilities.

The 110 million sq. ft of cumulative absorption since 2021 positions 3PL operators as one of the warehousing sector's largest occupier categories throughout this measurement period. The sector's consistent 28-42% absorption share across five annual cycles demonstrates structural demand resilience rather than cyclical volatility. E-commerce/quick commerce and manufacturing businesses tend to outsource logistics to 3PL players, but the biggest challenge still remains, attracting and retaining trained talent. Ideally, developer, occupier, and 3PL convergence from the planning phase through construction to operations can bring much-needed synergy to the process.

JLL is India's leading professional services firm specialising in real estate. Over the past two decades, the Firm has established a strong presence across ten major cities (Mumbai, Delhi NCR, Bengaluru, Pune, Chennai, Hyderabad, Kolkata, Ahmedabad, Kochi, and Coimbatore) and more than 130 tier-II and III markets, with over 18,000 professionals. JLL India serves investors, developers, multinational companies and local corporates, through a range of services including leasing, capital markets, project development, facility management, property management, transaction management, and research advisory. These services cover diverse asset classes: office, industrial, warehouse and logistics, data centers, residential, retail, hospitality, healthcare, senior living, and education. For further information, please visit https://www.jll.com/en-in/.