Warehousing companies torn between rising demand and flat rentals

Despite strong demand from e-commerce and 3PLs, rising land and construction costs are squeezing margins, pushing developers to seek private equity, Reits, and InvITs

Warehousing players are facing a double whammy with demand from e-commerce and third party logistics players outpacing supply yet rentals remaining flat and land and construction costs continue to climb, leading to pressure on margins. The result, warehousing companies are turning to external capital to maintain profitability and growth. Sector watchers say rentals would eventually have to rise but competition from unorganised players is preventing any sharp corrections.

 

Pan-India average warehousing rent stood at Rs 22 per square foot (psf) in H1 2025, up slightly from Rs 20 psf in H1 2022, according to Vestian. 

 

“There is no doubt that