High e-commerce demand has positively impacted the logistics sector with the Indian industrial and logistics (I&L) sector expecting a significant surge in 2025, according to a report by CBRE. The report highlights that demands for warehousing solutions has gone up particularly from the e-commerce industry enabling the sector to gain a higher momentum in the second half of 2024.
The sector has projected a strong growth trajectory in 2025, as per the report, the growth is attributed to several factors including the increasing need for warehousing, quality supply, continued transactions and speeding e-commerce market. The engineering and manufacturing (E&M), fast-moving consumer goods (FMCG), and e-commerce industries are also likely to have high lease demand, with third-party logistics (3PL) continuing to be the largest tenant category, especially as lifestyle goods like fashion apparel are increasingly appearing on e-commerce platforms and not q-commerce platforms as well which necessitates proper management of logistics, both for deliveries and returns.
In order to address the growing need for cutting-edge logistical facilities, developers are being supported by institutional investors to build contemporary, environmentally friendly warehouses. Significant warehouse building is already taking place in major cities guaranteeing a strong supply chain by 2025.
However, the report also emphasised on the possible challenges that could potentially hinder the on time competition of projects. These obstacles are related to acquisition costs, prolonged acquisition processes, intricate land ownership structures, and ongoing legal proceedings are among the factors that may cause delays. In response to the situation, developers are anticipated to investigate alternate sites in response, especially in outlying areas and along important infrastructural routes.
India’s industrial and logistics industry sector recorded a compound annual growth rate (CAGR) of 20 per cent between 2019 and 2024, In this, 68 per cent of the investments are made via foreign investors.
Even amid the dynamically changing condition of the sector, the investor sentiment remains positive for 2025.
