Building India’s growth backbone: Warehousing wave and InvITs

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India’s economic transformation has reached an inflection point where physical infrastructure, capital markets, and real estate converge to power the next era of high‑quality growth. At the centre of this shift is the Indian warehousing sector, which has rapidly evolved from a fragmented support function into a strategic backbone for manufacturing competitiveness, digital commerce, and consumption‑led expansion—an increasingly important pillar of the brader Indian real estate sector.

How modern warehousing became core logistics in India

For years, warehousing operated through small, informal godowns in suboptimal locations, limiting scale and efficiency. Over the last decade, however, heavy investment in corridors, highways, ports, and rail, combined with the rise of ecommerce and organised retail, has catalysed a decisive pivot toward Grade A, technology enabled assets. These modern facilities deliver higher throughput, better safety and compliance, and seamless integration with transport networks — now recognised as core logistics infrastructure in India.

Capital market participation through REITs and InVITs in warehousing real estate

The maturation of capital markets has reinforced this progression. Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InVITs) provide transparent, regulated pathways for long-term capital to access income-generating assets. While office REITs and road/energy InVITs led the first wave, the next phase is set to feature logistics, warehousing, and infrastructure-linked assets with long leases, diversified tenants, and inflation-linked escalations. As portfolios scale across key corridors, these vehicles will further institutionalise warehousing real estate in India, lower cost of capital, and accelerate asset monetisation.

National Logistics Policy and policy tailwinds reshaping industrial real estate

Policy has been pivotal. The National Logistics Policy India promotes integrated planning, digitisation, and service quality standards, complementing multimodal corridors and logistics parks. Together, these reforms are reducing bottlenecks and improving speed, predictability, and resilience across supply chains — benefits that ripple through industrial real estate India as manufacturers co-locate plants and distribution nodes to optimise working capital and time-to-market.

India’s warehousing hubs and emerging logistics corridors

Established hubs such as DelhiNCR, Mumbai–Pune, Bengaluru, Chennai, and Hyderabad remain dominant given their consumption depth, port and airport linkages, and strong industrial bases. At the same time, Tier2/3 locations, Jaipur, Lucknow, Indore, Coimbatore, Ahmedabad, are becoming regional fulfilment and cross dock centres, supported by improved expressways and multimodal connectivity. This balanced dispersion underpins a more resilient national grid for the Indian warehousing sector.

Tier 2 and Tier 3 opportunity

Rising consumption in Tier 2 and 3 cities resulting from higher incomes, digital adoption.
Proximity‑led fulfilment expansion led to hubs being set up closer to demand.
State incentives accelerating growth with land support, fast approvals.
Balanced logistics distribution led to wider reach, local impact.

Port-led and multi-modal growth

Ports shaping warehousing hubs by setting up coastal parks integrate logistics.
Port‑led facilities boost efficiency with lower dwell times, costs.
MMLPs enable multimodal connectivity through road‑rail‑air‑port integration.
Strengthening domestic and global chains as unified setups support trade.
Emerging logistics corridors creating long‑term value for investors.

What is driving warehousing investment trends in India

Multiple structural drivers are drawing investors into warehousing real estate in India:

Rising consumption and a decisive shift toward organised retail and omnichannel models.

Ecommerce growth and quick commerce footprints that require dense, urban proximate networks.

Production-linked expansion in electronics, automotive, and engineered products, lifting demand across industrial real estate in India.

Global supply chain diversification into India, favouring compliant, automation-ready facilities.

These factors, combined with platform-level operating capabilities, are shaping warehousing investment trends in India towards larger portfolios, city cluster strategies, and ESG-ready, automation-enabled parks.

Execution risks and operational realities in warehousing real estate

To sustain momentum, stakeholders must navigate land aggregation and zoning nuances, state-level variance in approvals, rising construction and financing costs, and talent needs in operations and automation. Embedding sustainability, such as energy efficiency, water management and green materials, will be essential as institutional benchmarks tighten across the Indian real estate sector.

Risk Type	Likelihood	Impact	Quadrant
Land acquisition	High	High	Critical
Regularity delays	Medium- High	High	Strategic
Yield compression	High	Medium	Competitive
Tenant concentration risk	Medium	Medium	Operational

Outlook

Warehousing as the backbone of India’s next growth cycle

A modern, technology-enabled logistics grid, supported by corridors, parks, and data-driven operations, will define India’s next growth phase. With policy alignment with the National Logistics Policy of India, expanding logistics infrastructure in India, and robust capital-market channels, warehousing real estate in India is set to anchor supply-chain resilience, faster fulfilment, and competitive exports. Along with warehousing, REITs/InVITs, and industrial platforms will help deliver a more connected, productive, and globally competitive economy, making logistics the cornerstone of India’s high-quality growth journey.

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