Opportunities in India’s Logistics Real Estate Sector

India’s logistics industry is undergoing a major transformation, fueled by rapid urbanization, booming e-commerce, infrastructure upgrades, and evolving supply chain models. Among the biggest beneficiaries of this shift is the logistics real estate sector, which includes the development, leasing, and management of warehousing, distribution centers, and fulfillment hubs.

With the government’s push toward Make in India, Gati Shakti, and PM Gati Shakti National Master Plan, India’s logistics infrastructure is not only expanding in scale but also evolving in sophistication. This is creating a dynamic set of opportunities for investors, developers, and businesses alike.

In this blog, we explore the key drivers, emerging trends, and investment potential in India’s logistics real estate sector.

The Logistics Real Estate Boom in India

According to a Knight Frank report, India’s warehousing and industrial real estate saw over 51 million square feet of new supply in FY 2023, with robust leasing activity in key metros and tier-2 cities. The demand was primarily driven by:

• E-commerce and quick commerce expansion

• Third-party logistics (3PL) providers

• Manufacturing growth across sectors like electronics, FMCG, and pharma

• Supply chain decentralization after COVID-19

• Government incentives for infrastructure development

Key Drivers of Growth

1. E-commerce and Digital Retail

The Indian e-commerce market is projected to reach $350 billion by 2030, according to Invest India. This growth is fueling demand for grade-A warehouses, micro-fulfillment centers, and cold storage in strategic urban and semi-urban locations.

• Flipkart, Amazon, Meesho, and Reliance Retail are leasing millions of square feet to cater to increasing delivery timelines and customer zones.

• The rise of quick commerce (10–30 minute delivery) has led to the surge of intra-city warehousing demand.

2. The Gati Shakti National Master Plan

Launched by the Indian government in 2021, the Gati Shakti initiative aims to reduce logistics costs from 14% of GDP to 8–9% by building integrated infrastructure corridors.

Learn more: PM Gati Shakti: Transforming India’s Infrastructure

This master plan provides a massive boost to multi-modal logistics parks (MMLPs), freight corridors, and dedicated warehouse zones, opening up real estate development opportunities near highways, industrial belts, and ports.

3. Entry of Global Investors and REITs

India’s logistics sector has seen significant foreign direct investment (FDI), with firms like Blackstone, ESR, LOGOS, CPPIB, and Indospace entering the fray.

• Indospace, India’s largest logistics real estate platform, has developed over 50 million sq. ft. of warehousing space.

• Global REITs are exploring logistics as a high-yield asset class, with many entering build-to-suit agreements with 3PL and e-commerce players.

4. Emergence of Tier-2 and Tier-3 Warehousing Hubs

Beyond the metros (Mumbai, Delhi NCR, Bengaluru, Chennai), smaller cities like Pune, Jaipur, Lucknow, Coimbatore, Guwahati, and Indore are emerging as warehousing hotbeds. The reasons include:

• Proximity to consumption markets

• Lower land and operational costs

• Improved road and rail connectivity

• State-level industrial policies

Related: India-Agent.com – Connect with local logistics agents across cities

Types of Logistics Real Estate Opportunities

1. Grade-A Warehousing Parks

These are modern, large-format warehouses with superior infrastructure, including high ceilings, automated docks, fire safety systems, and IT-enabled security. Developers offering plug-and-play solutions are highly sought after by global clients.

Example: ESR India and Indospace operate such facilities near Mumbai, Bengaluru, and Hyderabad.

2. Cold Chain Warehousing

India’s growing demand for frozen food, vaccines, and perishable goods is leading to a spike in temperature-controlled warehouses, especially in urban areas and export zones.

• Supported by PLI schemes for pharma and food processing

• Cold chain market expected to reach INR 3,000 billion by 2027

Related reading: Smart Warehousing and Cold Chain Logistics in India

3. Intra-city Warehouses / Last-mile Fulfillment Centers

These smaller warehouses are located within or close to city limits for fast delivery and inventory sorting. Ideal for e-commerce, grocery, food delivery, and D2C brands.

• Built vertically in high-density areas

• Optimized for AI-based picking, returns processing, and hyperlocal dispatching

4. Multi-Modal Logistics Parks (MMLPs)

Developed near highways, industrial corridors, or ports, these large-scale parks offer integrated warehousing, transportation, and value-added services. The Ministry of Road Transport and Highways is facilitating 35 such MMLPs under the Bharatmala project.

Source: MMLP Project Details – Ministry of Transport

Challenges and Solutions

Despite its growth, the logistics real estate sector in India faces some hurdles:

The National Logistics Policy (2022) is a key step toward solving many of these pain points, offering a holistic approach to improving India’s logistics competitiveness.

Learn more: National Logistics Policy

Investment Outlook

With India’s logistics market expected to reach $380 billion by 2025, the real estate component offers tremendous long-term potential. Here’s why:

• High rental yields compared to residential and retail assets

• Long-term lease tenures with blue-chip tenants

• Stable demand cycle driven by essential goods, e-commerce, and manufacturing

• Inflation-linked rent escalations and service fee income

• Sustainable building practices improving ESG ratings

Developers and foreign investors are increasingly using green building certifications (IGBC, EDGE) to attract ESG-focused funding.

Conclusion: Why Logistics Real Estate is India’s Next Big Bet

India’s logistics real estate sector is no longer a back-office support asset—it is becoming a core enabler of India’s economic growth story. As supply chains modernize and demand for fast, efficient delivery rises, the need for sophisticated logistics infrastructure will only grow.

From large-format warehousing parks to micro-fulfillment centers and cold storage hubs, opportunities abound for:

• Real estate developers

• Institutional investors and REITs

• Logistics companies and startups

• State governments and industrial policy planners

For businesses looking to enter or scale in India’s logistics space, choosing the right location and infrastructure partner is critical. Platforms like India-Agent.com help global businesses find verified logistics agents, industrial property consultants, and warehouse partners across India.