"Demand from the manufacturing sector has compensated for the lull in e-commerce and helped broad base the market's occupier profile," said Shishir Baijal, Chairman and Managing Director, Knight Frank India.

While the availability of viable land for warehousing development remains a challenge, high institutional interest in this space should enable development of high-quality supply, he added.

Delhi-NCR was the second most prolific market, representing 17 per cent of the total warehousing area transacted during the period, with third-party logistics and manufacturing sectors driving volumes.

Pune was the most expensive warehousing rental market, with average rent at Rs 26 per sq ft a month.

It was followed by Kolkata with a rental rate of Rs 23.8 per sq ft monthly and Mumbai at Rs 23.6 per sq ft a month.

Pune and Chennai showcased a 4 per cent increment in rentals, followed by NCR and Kolkata at 3 per cent YoY growth, said the report.

"India's robust fiscal position and resilient economy are well-positioned to sustain and enhance the warehousing market's stability and growth potential for the remainder of fiscal year 2024," said Baijal.

The country has benefited from the sustained move towards decentralisation of manufacturing capacity with global manufacturing giants such as Apple, Samsung, Foxconn and TSMC expanding their manufacturing base in the country.