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Warehousing leasing activity in Kolkata declined 30% year-on-year in 2025 to 4.6 million sq ft from 6.5 million sq ft in 2024, largely due to elevated land prices and constrained availability of Grade A facilities, according to a report by Knight Frank India. Despite the drop in transactions, the consultancy noted that the city's logistics market remains structurally strong, supported by infrastructure improvements and evolving occupier demand. Third-party logistics (3PL) and e-commerce continued to drive demand, while the manufacturing sector increased its share of leasing activity. Dankuni remained the dominant warehousing cluster, accounting for the majority of leasing activity due to its strategic connectivity and established logistics ecosystem.
Warehousing leasing activity in Kolkata declined by 30% year-on-year in 2025 to 4.6 million sq ft, compared with 6.5 million sq ft recorded in 2024, according to a report released by Knight Frank India. Advertisement
The consultancy attributed the decline primarily to supply-side constraints, including elevated land prices and the limited availability of Grade A warehousing facilities in the market. Despite the moderation in overall leasing volumes, the report stated that Kolkata's warehousing sector continues to demonstrate long-term potential supported by infrastructure upgrades and changing occupier requirements.
Third-party logistics (3PL) operators and e-commerce companies remained the largest demand drivers in the market. However, the share of the 3PL segment declined to 32% of total leasing transactions in 2025 from 42% a year earlier, indicating shifts in occupier strategies and sectoral demand patterns.
In contrast, the manufacturing sector recorded notable growth, with leasing activity rising 7% year-on-year. The sector expanded its share of total transactions to 21% in 2025 from 13% in the previous year, emerging as a key contributor to demand for logistics space.
E-commerce companies accounted for 22% of total warehousing leasing during the year, supported by continued consumption trends and rising demand for last-mile delivery infrastructure. The fast-moving consumer durables (FMCD) segment maintained a stable share of 6%, while the FMCG and retail sectors registered marginal increases in leasing activity.
From a geographical perspective, Dankuni and its surrounding areas continued to dominate Kolkata's warehousing market. The cluster accounted for 60% of total leasing activity in 2025, marginally higher than its 59% share in the previous year. The location's proximity to the Durgapur Expressway and Old Delhi Road, along with strong connectivity and labour availability, has reinforced its position as a key logistics hub in eastern India.
Leasing activity along the National Highway 16 corridor (formerly NH 6) increased its share to 40% in 2025 from 38% a year earlier, driven by improved connectivity and the availability of Grade A warehousing facilities. Meanwhile, the Taratala-Maheshtala and Andul Road clusters did not record any leasing transactions during the year.
Joydeep Paul, Senior Director Occupier Strategy and Solutions at Knight Frank India, stated that the decline in leasing volumes was largely driven by supply constraints rather than weakening demand.
He said that while 2025 saw a temporary moderation in leasing activity, the fundamentals of Kolkata's warehousing market remain strong. He added that the decline was primarily due to elevated land costs and limited Grade A supply, rather than demand-side weakness.
According to the report, Grade A warehouse rentals along the NH 16 corridor ranged between INR 18 and INR 27 per sq ft per month. In comparison, rents in the Dankuni and suburban clusters were slightly lower, ranging between INR 18 and INR 25 per sq ft per month.
Knight Frank expects leasing activity in the city to regain momentum as infrastructure development continues and manufacturing and e-commerce companies expand their logistics networks in eastern India.
Source - PTI
5th Jun, 2025
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