Sustainable warehousing has become central to future of logistics in India. As the demand for warehouse space is projected to reach 1.2 billion sq. ft. by 2027. This transformation is driven by dual pressures of environmental imperatives and demand of e-commerce, manufacturing, and retail.
The foundation of sustainable warehousing lies in embedding eco-conscious practices across design, construction, and operations. Green building designs feature innovations such as permeable pavements, green roofs, and drought-resistant landscaping, which reduce stormwater runoff, combat urban heat islands, and encourage biodiversity. Energy efficiency is a cornerstone, with warehouses increasingly integrating solar panels, energy-efficient HVAC systems, and advanced insulation to slash energy consumption. Technologies such as IoT-driven energy management systems amplify these efforts.
Water conservation is another key pillar. Rainwater harvesting systems, low-flow fixtures, and real-time monitoring are now standard features, aiding groundwater replenishment and curbing waste. Waste management strategies focus on reducing, recycling and responsibly disposing of materials, with prefabricated components used to minimise construction waste. Generally, warehouses are strategically sited near transport hubs to reduce emissions from logistics operations, enhancing efficiency, while delivering environmental benefits.
One of the most notable shifts is the emergence of green leasing. Nascent in India, this practice embeds sustainability commitments into agreements between landlords and tenants. These contracts promote energy efficiency, water conservation, and waste reduction. For instance, landlords might invest in renewable energy systems, while tenants adopt energy-saving operational practices. The result is a win-win dynamic: landlords benefit from higher asset values and longer tenancy durations, while tenants enjoy reduced operational costs and enhanced brand reputation.
The momentum for sustainable warehousing is underscored by the demand for certifications such as LEED, IGBC, and EDGE. These certifications, increasingly sought by companies, validate eco-friendly efforts and provide a competitive edge in an environmentally conscious market. But challenges persist. High upfront costs, limited access to green technologies, and insufficient awareness are hurdles. Yet regulatory support, including initiatives such as the Energy Conservation Building Code and tax incentives for green buildings, is nudging developers and investors toward sustainability.
Institutional investments reflect this shift. The industrial and warehousing sector in India attracted a record US$ 6.5 billion in 2024, a 22 per cent rise from the previous year. Of this, US$ 2.5 billion flowed into industrial and warehousing projects, accounting for 39 per cent of total real estate investment volumes and surpassing the once-dominant office segment. Green leasing has been a key driver of this growth. Manufacturing and industrial growth in the country was robust throughout last year, which was reflected in the performance of macro-economic indicators such as Manufacturing Purchasing Managers Index and Index of Industrial Production.
Green financing mechanisms offer preferential terms for projects meeting specific environmental criteria, reducing the cost of capital for developers. These instruments align financial incentives with sustainability goals, providing an economic rationale for eco-friendly warehousing facilities. The government’s role in fostering sustainable warehousing cannot be understated. Policies such as the ECBC and various tax benefits for green buildings encourage developers to prioritise eco-
friendly initiatives.
