India's warehousing investment pipeline: 238 million sq. ft. and counting toward a 700 million target by 2028

Grade A warehousing stock across India's top eight cities reached 238 million square feet in 2024, having grown at a compound annual growth rate of 22% since 2019, according to JLL India. That trajectory, combined with record net absorption and an expanding institutional capital base, positions the logistics and warehousing segment as the fastest-scaling vertical in Indian real estate.

The numbers mark a structural inflection. What was once a fragmented, developer-led market dominated by unorganised operators has become a destination for platform-level institutional investment. For leaders across the real estate and infrastructure ecosystem, the warehousing pipeline through 2028 now demands the same rigour of analysis previously reserved for office and residential portfolios.

Record absorption signals sustained occupier demand

Net absorption for logistics and industrial real estate reached an all-time high of 50.4 million square feet in 2024, according to JLL India. The momentum carried into the following year: data from Savills India shows the industrial and logistics segment recorded absorption of 21.3 million square feet in Q3 2025 alone, representing 21.7% year-on-year growth.

These figures reflect a confluence of demand drivers. Third-party logistics providers continue to expand footprints along national highway corridors. Manufacturing firms, incentivised by production-linked incentive schemes, are securing purpose-built facilities near multimodal nodes. E-commerce operators remain the most aggressive source of incremental demand: Knight Frank Research projects that the e-commerce sector's demand for warehousing space in India will rise by 165% during FY 2022–2026 compared to the previous five-year period.

The absorption data is particularly significant because it outpaces new supply additions in several micro-markets, keeping vacancy rates compressed and rental yields attractive for institutional holders.

How large will India's warehousing stock become by 2028?

Two credible projections frame the buildout ahead. JLL India estimates that total warehousing stock across the top eight cities will hit approximately 700 million square feet by 2028. CareEdge Ratings offers a more conservative but complementary lens: India's total Grade A warehousing stock will exceed 420 million square feet by 2028, with vacancy rates expected to stay below 10%.

The gap between the two figures reflects differing definitions. The JLL estimate captures total stock, including Grade B and transitional assets, while CareEdge focuses exclusively on institutional-quality, Grade A inventory. Both trajectories confirm the same directional thesis: India's warehousing capacity is set to nearly triple from current levels within four years, driven by greenfield development, brownfield upgrades and the conversion of legacy industrial land into modern logistics parks.

Vacancy rates below 10%, as projected by CareEdge Ratings, would represent a historically tight market, reinforcing the case for continued capital deployment into speculative development rather than purely build-to-suit models.

Who is deploying institutional capital into Indian logistics real estate?

The maturation of the sector is visible in the profile of capital allocators entering the market. Godrej Fund Management operates as an institutional-grade fund manager with assets under management of approximately USD 1 billion, focusing on investing in residential and commercial assets across India, according to GRI Institute data. The firm's platform approach, which spans residential and commercial verticals, reflects a broader trend: fund managers are treating logistics and warehousing as a core allocation rather than an opportunistic sidecar.

On the infrastructure-linked side, Highway Concessions One Private Limited acts as the investment manager of the Vertis Infrastructure Trust, managing infrastructure and logistics-linked assets, according to Vertis Infrastructure Trust disclosures from 2024. This structure illustrates how logistics real estate and transport infrastructure are converging under unified investment vehicles, enabling integrated returns across the value chain from highway concessions to last-mile distribution centres.

Cross-border capital flows add another layer of institutional depth. At GRI Institute events, Martin Soell of Natixis Pfandbriefbank AG has noted that international investors are increasingly evaluating Indian real estate through a sustainability lens. The convergence of renewable energy infrastructure with logistics parks, particularly for co-located clean power serving data centres and manufacturing gigafactories, is emerging as a differentiated value proposition for foreign capital.

Platform-based investments are becoming the dominant deal structure. Rather than acquiring individual assets, global investors are backing scaled logistics platforms capable of aggregating land, developing Grade A facilities and managing tenant relationships across multiple cities simultaneously. This approach reduces execution risk and provides institutional investors with portfolio-level diversification from a single commitment.

Policy architecture is accelerating formalisation

Three policy initiatives are shaping the regulatory environment for warehousing investment.

The National Logistics Policy, launched in 2022 and under ongoing implementation through 2025, provides the overarching strategic roadmap. Its central objective is to reduce India's logistics costs from 14–15% of GDP to a global benchmark of 8% through digital integration and multimodal connectivity. For warehousing investors, the policy creates a supportive macro framework: every percentage point reduction in logistics costs strengthens occupier margins and, by extension, their capacity to pay institutional-grade rents.

At the state level, the Madhya Pradesh Logistics Policy 2025 aims to reduce logistics costs to global benchmarks, enhance multimodal connectivity and foster supply chain efficiency through the development of Multi-Modal Logistics Parks. These MMLPs represent a new asset subclass within the warehousing universe, combining storage, cross-docking, cold chain and intermodal transfer facilities in integrated campuses.

The Delhi Logistics and Warehousing Policy 2025, released in draft form in July 2025, proposes relocating warehouses to the capital's outskirts and establishing modern Urban Consolidation and Logistics Distribution Centres to decongest the city and reduce vehicular pollution. If implemented, this policy would trigger a significant wave of brownfield-to-greenfield relocation activity in the National Capital Region, creating acquisition opportunities for developers with pre-positioned land banks along Delhi's peripheral expressways.

Taken together, these policies signal that warehousing formalisation is a bipartisan, multi-level government priority. Institutional investors can underwrite long-duration capital commitments with greater confidence that regulatory tailwinds will persist.

What risks should investors monitor in the warehousing pipeline?

Despite the favourable trajectory, several structural risks warrant attention.

Land acquisition remains the primary bottleneck. While verified data on exact land bank acreage held by institutional developers is not publicly available, industry participants at GRI Institute forums consistently cite land title clarity, conversion timelines and aggregation costs as the leading friction points in scaling greenfield development.

Concentration risk is another concern. The top eight cities account for the vast majority of Grade A stock. Secondary cities are attracting interest but lack the transport connectivity and labour ecosystems needed to support institutional-quality operations at scale. The success of state-level policies like Madhya Pradesh's logistics framework will be tested by whether they can channel investment beyond established corridors.

Finally, the rapid pace of stock addition, from 238 million square feet today toward a projected 700 million square feet by 2028, carries absorption risk in specific micro-markets. Developers building speculative capacity in tier-two locations without committed anchor tenants may face extended lease-up periods, particularly if macroeconomic conditions slow e-commerce growth or manufacturing expansion.

The institutional thesis is clear, and the execution window is open

India's warehousing and logistics segment has crossed the threshold from emerging opportunity to established institutional asset class. A 22% CAGR in Grade A stock since 2019, record absorption exceeding 50 million square feet in a single year, and a policy architecture explicitly designed to reduce logistics costs to global benchmarks collectively form a compelling investment thesis.

The capital pipeline reflects this conviction. Fund managers such as Godrej Fund Management and infrastructure-linked vehicles like those managed by Highway Concessions One Private Limited are deploying at scale. Cross-border investors, guided by sustainability criteria and attracted by platform-level deal structures, are deepening their India allocations.

For leaders navigating this pipeline, three data points serve as anchoring reference markers. Grade A stock at 238 million square feet today, projected to exceed 420 million square feet by 2028, according to CareEdge Ratings. Total stock targeting 700 million square feet across the top eight cities by 2028, according to JLL India. And vacancy rates expected to remain below 10%, ensuring that new supply will meet, rather than overwhelm, occupier demand.

GRI Institute continues to convene institutional investors, developers, fund managers and infrastructure operators shaping this pipeline, including through the GRI Warehousing & Logistics Industrial Forum India 2026, where capital allocation strategies and operator-developer structures will be examined in depth.