India's warehousing boom: Tier II-III cities drive 100M sq. ft.

• India's total warehousing stock in top 20 cities has reached 533 million sq. ft in 2024.
  
  
• Emerging 12 Tier II-III cities now contribute ~100 million sq. ft, approximately 18.7% of the total stock.
  
  
• Combined absorption across 20 warehousing markets reached all time high at ~60 million sq. ft in 2024.
  
  
• Grade A spaces constitute ~30% of inventory in 12 emerging Tier II-III cities.
  
  
• The rise of Tier II-III cities indicates a shift towards hub-and-spoke model, improving last-mile delivery capabilities.

MUMBAI, 13 FEBRUARY 2025: India’s warehousing landscape is expanding, with Tier II-III cities emerging as new powerhouses in the sector. As of 2024, India's total warehousing stock has reached 533.1 million sq. ft, with emerging Tier II-III cities now contributing approximately 100 million sq. ft, or about 18.7% of the total stock. This shift represents a fundamental change in the country's logistics map towards hub-and-spoke model as envisioned during the implementation of Goods and Service Tax (GST).

Note: JLL considers Hosur City, a large Tier II warehouse market, as part of Bengaluru City. Therefore, the numbers of Hosur City are accounted in the numbers of Tier 1 Top 8 Cities.

“The Indian warehousing market has experienced remarkable growth in major cities since implementation of GST. Growth is now expanding to emerging Tier II-III cities as hub and spoke model is playing out. The emerging cities saw noteworthy100 million sq. ft. of stock in 2024, a fourfold increase since 2017. At JLL, we anticipate this momentum continuing, fueled by critical infrastructure initiatives that are linking these emerging cities with major consumption hubs. This rapid development is creating investment opportunities for both investors and developers in the logistics sector. This trend is not just reshaping India's logistics landscape, but also offering decent returns for those ready to capitalize on this burgeoning market,” said Yogesh Shevade, Head – Logistics & Industrial, India, JLL. 

The growth in these emerging cities is driven by several factors. The e-commerce boom, particularly the widespread ‘click and buy’ trend, is transforming India’s warehousing. This has led to increased demand for fulfillment centers closer to end consumers. Companies are also setting up smaller warehouses in these cities to improve delivery times and reduce logistics costs. These cities also offer access to larger spaces due to lower population density, ideal for warehouses near consumption centers.

"The Shifting Landscape of Warehouse Markets Report" was unveiled today by JLL at LogiMAT India 2025 in Mumbai. The world’s biggest logistics and warehousing satellite show, LogiMAT India 2025 officially commenced today with a grand opening ceremony at the Bombay Exhibition Centre in Mumbai. The event was inaugurated by Dr. P. Anbalagan (IAS), the Secretary of the Industries Department of the Government of Maharashtra. Also present at the ceremony were Aditya Gupta, CEO of Messe Stuttgart India; Chandranath Dey, India Head of Operations and Business Development for Logistics & Industrial at JLL; Charmy Shah, Assistant Manager of Logistics & Industrial at JLL; and Bernhard Müller, Vice President, Landesmesse Stuttgart GmbH and Director, Messe Stuttgart India.

Aditya Gupta, CEO of Messe Stuttgart India, stated, “This report by JLL aims to transform India’s logistics and warehousing sector by addressing the gap in Tier II and Tier III cities, which are emerging as new warehousing hubs. I believe that the report launched today at LogiMAT India will inspire meaningful discussions and strategic collaborations that will enable the logistics sector to thrive in the coming years.”

Concurrently, infrastructure initiatives such as PM Gati Shakti, Bharatmala, Sagarmala, UDAN Scheme, and the development of freight corridors have optimized distribution networks. Programs such as Make in India, Digital India, and the National Logistics Policy have fostered conducive manufacturing ecosystems across the country. The introduction of Production-Linked Incentives (PLI) and Design-Linked Incentives (DLI) schemes has incentivized companies to set up manufacturing facilities in these cities. This shift represents a fundamental transformation in India's logistics landscape. It offers new opportunities for businesses to optimize supply chains, reduce costs, and improve delivery times. As Tier II-III cities continue to grow in importance, they are reshaping the competitive dynamics of India's logistics sector and driving the future growth of the warehousing industry.

JLL is India’s premier and largest professional services firm specialising in real estate. The Firm has grown from strength to strength in India for the past two decades. JLL India has an extensive presence across 10 major cities (Mumbai, Delhi NCR, Bengaluru, Pune, Chennai, Hyderabad, Kolkata, Ahmedabad, Kochi, and Coimbatore) and over 130 tier-II and III markets with a cumulative strength of over 15,000 professionals. The Firm provides investors, developers, local corporates, and multinational companies with a comprehensive range of services. These include leasing, capital markets, research & advisory, transaction management, project development, facility management and property & asset management. These services cover various asset classes such as commercial, industrial, warehouse and logistics, data centres, residential, retail, hospitality, healthcare, senior living, and education. For further information, please visit jll.co.in