India's 3PL sector leads warehousing demand with 110 mn sq ft
3PL players consistently captured up to 42% of India's annual warehousing demand since 2021, per JLL.
India's third-party logistics sector recorded cumulative gross warehousing absorption exceeding 110 million square feet between 2021 and the first half of 2026, establishing itself as the dominant occupier segment in the country's warehousing market, according to a report by JLL, a global real estate and investment management firm, titled 'Beyond the Box: The Future of Real Estate of India's Leading 3PL Players', released on 19 August 2026.
The sector absorbed 11.1 million square feet in the first half of 2026 alone, maintaining a consistent absorption share of between 28% and 42% throughout the five-year period, a pattern JLL said reflected structural demand resilience rather than cyclical volatility. Average deal sizes across the sector grew 25%, from 100,000 square feet in 2021 to 125,000 square feet in 2025, with Grade A facilities specifically averaging transaction sizes of 145,000 square feet in 2025, a trend JLL attributed to network consolidation strategies and longer-term commitments to quality infrastructure.
Yogesh Shevade, Managing Director for Industrial and Logistics in India at JLL, said the 3PL sector consistently captured the highest share of gross warehousing demand, establishing itself as one of the market's most consistent growth engines, and that the growth in average deal sizes signalled a longer-term shift toward future-ready infrastructure supporting automation, sustainability and technology integration in India's manufacturing and logistics sectors.
The report also pointed to a pronounced shift toward institutional-grade infrastructure, with Grade A space's share of 3PL absorption rising from 50% in 2021 to 57% in 2025. Overall rents across the sector grew at a compound annual growth rate of 3.9% between 2021 and 2025, reaching INR 21 per square foot, while Grade A rents grew faster, at a compound annual growth rate of 4.9%, reaching INR 23 per square foot in 2025 and INR 23.7 per square foot in the first half of 2026, a 7.7% year-on-year increase that outpaced the broader market.
JLL noted a mismatch between market rentals and occupier expectations, describing the widening premium for Grade A space as a sign that occupiers were willing to absorb higher costs in exchange for enhanced operational capabilities. The report flagged that shorter contractual terms typically offered by customers, combined with expectations of heavy technology and operational investment from 3PL players, presented a challenge to higher technology penetration across the sector. It added that attracting and retaining trained talent remained the sector's biggest challenge, even as e-commerce, quick commerce and manufacturing businesses increasingly outsourced their logistics operations to 3PL players.
