NCR to Bengaluru: India's 3rd party logistics mkt sparks investor frenzy

Delhi-NCR emerges as the largest 3PL hub with 25% share of total I&L leasing since 2021

India’s third-party logistics (3PL) sector is rapidly evolving into a cornerstone of the country’s economic growth and a prime investment destination for both domestic and international players. According to a recent report by CBRE South Asia Pvt. Ltd., titled “Built to Scale: How 3PL is Solving India’s Supply Chain Puzzle”, nearly 70% of APAC-based 3PL companies are planning to expand their footprint in India over the next two years.  The country’s robust economic growth, coupled with resilience amidst global geopolitical uncertainties, is making it a magnet for logistics investments in the Asia-Pacific region.

3PL companies handle end-to-end supply chain and logistics operations for their clients. This allows businesses to concentrate on core functions such as product development, sales, and marketing, while leaving complex logistics to professional operators. With India’s e-commerce and quick commerce sectors experiencing exponential growth, alongside emerging demand in non-tier-I cities, nearly 80% of India-based 3PL firms plan to expand their portfolios by more than 10% over the next two to five years.

 

Why Investors Should Pay Attention

India’s 3PL sector is not just a logistics solution; it is fast becoming a profitable investment avenue. According to CBRE, 3PL providers accounted for 40–50% of total logistics real estate leasing activity between 2021 and 2024, reflecting the sector’s critical role in shaping India’s industrial infrastructure. In the first half of 2025 alone, these players captured more than 30% of leasing activity, indicating sustained momentum.

A key trend driving investor interest is the preference for multi-tenanted warehouse spaces, adopted by over 60% of 3PL firms. Unlike building proprietary facilities, multi-tenanted setups allow 3PL companies to scale quickly, reduce upfront capital expenditure, and mitigate risk by sharing infrastructure with other operators. This model is particularly appealing in the fast-evolving e-commerce ecosystem, where demand spikes can occur unpredictably, and flexibility is crucial.

Ram Chandnani, Managing Director, Leasing Services, CBRE India, explained,

"Multi-tenanted warehouses allow 3PL players to scale faster, lower upfront costs, and diversify risk. As demand from e-commerce and infrastructure pushes grows, this evolution underscores the sector’s pivotal role in building future-ready supply chains."

For investors, this is an attractive combination. Warehousing assets leased to 3PL operators typically enjoy long-term, stable lease agreements, underpinned by the predictable growth of e-commerce, retail, and manufacturing. Additionally, 3PL-led leasing ensures high occupancy rates and minimal downtime, making logistics real estate a low-risk, high-reward investment in comparison to traditional commercial real estate.  Key takeaways:

During 2021-H1 2025, 3PL firms were the primary drivers of “big-box” leasing (>100,000 sq. ft.), in terms of value and volume. This reflects the growing need for scalable, future-ready warehousing solutions to meet the surge in demand from e-commerce, retail, and manufacturing.

Also, Delhi-NCR has emerged as the largest 3PL hub in the country, accounting for 25% of total industrial and logistics (I&L) real estate leasing activity since 2021.  Mumbai follows it closely with a 24% share. Bengaluru has emerged as the third-largest hotspot for the sector with a 16% share. The top six cities, including Chennai, Kolkata, and Hyderabad, represent nearly 70% of the total 3PL leasing activity since 2021. 

Technology Adoption: Driving Efficiency and Returns

The sector’s growth is being accelerated by a rapid adoption of technology and automation. Modern 3PL companies are increasingly incorporating warehouse management software (WMS), IoT sensors, Goods-to-Person picking systems, and Automated Storage and Retrieval Systems (AS/RS).

These technologies are not merely operational enhancements—they directly affect investor returns. Automated warehouses reduce errors, downtime, and labor costs, while increasing throughput and overall operational efficiency. The adoption of advanced systems like robotic arms and collaborative robots (cobots) also signals a shift toward intelligent, data-driven supply chains, which are more resilient and capable of handling large-scale, unpredictable demand surges.

Investors looking at equity stakes in 3PL operators can see these technology investments as value multipliers. Firms that integrate automation and software are often better positioned to negotiate premium leasing rates, maintain high utilization, and deliver consistent financial performance.

Hotspots for 3PL Investments

CBRE’s report identifies Delhi-NCR as the largest 3PL hub in India, accounting for 25% of total industrial & logistics leasing activity since 2021. Close on its heels is Mumbai, with a 24% share, followed by Bengaluru at 16%. Other emerging hubs include Chennai, Kolkata, and Hyderabad, collectively representing nearly 70% of all 3PL leasing activity between 2021 and 2025 YTD.

These hubs are not just popular for their strategic connectivity—they also offer access to major consumer markets, manufacturing clusters, and export corridors. For investors, this geographic concentration provides clarity on where capital allocation can yield optimal returns. Choosing properties in or near these hubs allows investors to benefit from high occupancy rates, long-term lease agreements, and consistent rental growth.

Anshuman Magazine, Chairman & CEO, India, South-East Asia, Middle East & Africa, CBRE, added,

"Fuelled by resilient economic growth, India is emerging as a premier destination for warehousing expansion among businesses. In the 2025 APAC Logistics Occupier Survey, 83% of India-based 3PL respondents stated that their business performance would improve over the next 24 months."

The E-Commerce and Quick Commerce Effect

E-commerce and quick commerce are the primary demand drivers behind the 3PL boom. India’s e-commerce market alone is expected to surpass $200 billion by 2030, and this translates into massive warehousing and logistics requirements. Quick commerce, which promises delivery within 90 minutes, has further intensified the need for strategically located, technologically advanced warehouses.

The expansion into non-tier-I cities also reflects a broader trend: businesses are diversifying their supply chains to serve emerging markets, reduce delivery times, and lower costs. For investors, this geographic diversification of warehousing assets mitigates risk and ensures consistent demand, even if urban markets experience saturation.

Asset-Light Strategies: Multi-Tenanted vs. Build-to-Suit

3PL operators are increasingly favoring asset-light models. Over 60% of surveyed 3PL firms intend to lease space in multi-tenanted warehouses, compared to 28% pursuing build-to-suit and 22% purchasing existing assets. This approach offers multiple advantages:

Faster scalability: Operators can expand operations without waiting for construction or land acquisition.

Lower upfront costs: Reduces capital expenditure, freeing resources for technology adoption and human capital.

Risk diversification: Shared facilities lower concentration risk in case of regional demand fluctuations.

For investors, these asset-light strategies mean that multi-tenanted logistics properties are highly liquid, less capital-intensive, and consistently in demand.

Future-Ready Warehouses: A Smart Investment

Another trend driving investment is the emergence of future-ready, technology-driven warehouses. Around 76% of 3PL companies surveyed by CBRE have adopted warehouse management software, while many are integrating IoT, automated sortation, and AS/RS systems.

Automated, tech-enabled warehouses offer investors several advantages:

Operational efficiency: Faster inventory turnover and lower error rates.

Higher returns: Ability to charge premium rents due to advanced infrastructure.

Resilience: Automated systems are less prone to disruptions during labor shortages or spikes in demand.

By investing in these future-ready assets, investors not only align with India’s industrial growth but also tap into a sector that is poised for long-term structural growth.