Chennai recorded a 29 per cent year-on-year (YoY) growth in warehousing transactions volumes in 2024, the highest among India’s top eight markets, according to a study by Knight Frank India, a renowned international property consultancy firm. The city saw 5.8 million sq ft (mn sq ft) of transactions, largely driven by the manufacturing sector. Chennai also registered the second-highest leasing volume in manufacturing, contributing 14 per cent of the total share across these markets.
Chennai has a development potential of 40.7 mn sq ft to accommodate future demand, which is seven times the annual transaction volume in 2024. This capacity is well-positioned to support growing warehousing needs in the near future, says a release.
The manufacturing sector dominated industry-wise transaction volume, accounting for 54 per cent of total demand and recording a 103 per cent YoY increase in transacted volumes. This significant growth reinforces Chennai’s position as a leading manufacturing and industrial hub.
The retail and e-commerce sectors also experienced substantial growth, with retail transactions increasing by 94 per cent YoY, while e-commerce saw an exponential 1,158 per cent YoY rise (from a low base last year), driven by growing consumer demand and last-mile delivery needs. Meanwhile, 3PL demand remained steady, reinforcing its critical role in Chennai’s logistics ecosystem.
With respect to cluster split of transactions, the Sriperumbudur-Oragadam cluster consists of storage facilities situated between the Grand Southern Trunk Road (GST Road/Chennai-Trichy Highway) in the south and Poonamallee High Road (Mumbai Highway) in the west. It also includes the Mannur-Thiruvallur belt, covering Mevalurkuppam, Mappedu, Mannur, Pollivakkam, and Thiruvallur.
This cluster serves as the primary hub for the automotive industry and its ancillary production units. In 2024, it accounted for 61 per cent of Chennai’s total warehousing transactions, with all transactions in the Sriperumbudur-Oragadam cluster predominantly driven by the manufacturing sector. The NH 16/GNT Road-Periyapalayam cluster contributed 33 per cent of Chennai’s total warehousing transactions, with the manufacturing and 3PL sectors leading transaction activity in this region, the release said.
Shishir Baijal, Chairman and Managing Director, Knight Frank India said, “As a prominent manufacturing hub, Chennai plays a crucial role in India’s economy, particularly in the automotive, electronics, and engineering sectors. Beyond automobiles, its manufacturing ecosystem includes electrical and electronic components, fabrication, plastic injection moulding, and various engineering products.
Chennai has become a prime location for warehousing, witnessing robust leasing activity that reflects sustained demand. The sector’s outlook remains positive, supported by infrastructure enhancements and government initiatives.”
In 2024, the warehousing market of Chennai witnessed a rental value at ₹ 23.9/sq/ft/per month, reflecting a YoY growth of 2 per cent which in 2023 was ₹23.4 /sq/ft/per month.
Chennai’s warehousing market exhibits diverse land rates and rental prices, driven by the city’s strong industrial activity. In 2024, land rates have risen significantly. Madhavaram and Maraimalai Nagar command the highest land rates, while Grade A rentals are at their peak in Sriperumbudur, Oragadam, Irungattukottai, areas surrounding Mahindra World City, and Maraimalai Nagar.
In terms of rental value, rates for Grade A warehousing space in Maraimalai Nagar in the GST Road-Maraimalai Nagar Cluster recorded the rents in the range of ₹27 – 29sq ft/month, followed by In and around Mahindra World City which recorded rent in the range of INR 24 – 28/sq ft/month, the release said.
