India's 3PL sector leads warehousing demand, absorbing over 110 million sq ft since 2021

India's Third-Party Logistics (3PL) sector is leading the warehousing market, having absorbed over 110 million square feet of space between 2021 and the first half of 2026. A report by JLL, titled 'Beyond the Box: The Future of Real Estate of India’s Leading 3PL Players,' identifies the 3PL sector as the dominant occupier segment.

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India’s 3PL sector consistently captures the highest share of gross warehousing demand, thus establishing itself as one of the market’s most consistent growth engines.

Throughout this period, the 3PL sector consistently held absorption shares between 28% and 42%. This sustained momentum highlights the sector's resilience despite broader economic fluctuations. The report indicates a significant expansion in average deal sizes, growing by 25% from 100,000 sq. ft in 2021 to 125,000 sq. ft in 2025. This increase signifies not only scale but also a long-term growth trajectory and a demand for future-ready infrastructure.

Yogesh Shevade, Managing Director of Industrial & Logistics, India, at JLL, stated that this trend reflects India’s manufacturing and logistics sector becoming globally competitive through strategic infrastructure investments. These investments support automation, sustainability, and technology integration. There is a clear shift towards institutional-grade warehousing with modern specifications that accommodate technology integration and automation readiness.

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The 25% expansion in average deal sizes from 100,000 sq. ft in 2021 to 125,000 sq. ft in 2025 is not just about scale; it signals a long-term trajectory of growth and appetite for future-ready infrastructure.

While customers often prefer shorter contractual terms, they expect significant investments in technology and operations from 3PL players. This dynamic presents challenges for higher technology penetration. Rental analysis shows a compound annual growth rate (CAGR) of 3.9% for overall 3PL facilities from 2021 to 2025, reaching INR 21 per sq. ft. Grade A facilities experienced stronger growth at 4.9% CAGR, reaching INR 23 per square foot in 2025. The rental premium for Grade A facilities accelerated notably in the first half of 2026, with a 7.7% year-on-year increase.

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This is about India’s manufacturing and logistics sector becoming globally competitive through strategic infrastructure investment that supports automation, sustainability, and technology integration.