As quick commerce companies push ahead with ambitious expansion plans, demand for dark store locations in major cities is intensifying, thus pushing rental costs sharply higher – by around 35% – in some areas.
Companies opening dark stores
Companies such as Blinkit, Zepto, Flipkart’s Minutes, and Swiggy Instamart are opening hundreds of new dark stores across the country this year. But the bulk of their expansion is concentrated in a handful of high-demand urban markets, where customer adoption of rapid grocery delivery has been strongest.
This is leading to a supply squeeze in prime residential pockets of cities like Bengaluru, Mumbai and Delhi NCR, where micro-warehouses used by these platforms, known as dark stores, are now commanding steep premiums over standard warehouse or commercial rentals.
“The ambitious expansion targets have significantly amplified demand for prime urban locations, fuelling competition for micro-warehouses, especially in high-density areas,” Pawan Agarwal, director of sales and leasing at Agarwal Estates, told Fe.
In 2024, dark store rents rose by 20–25%, and experts say the pressure could be even greater this year. “Looking at the current market scenario, we expect a 25–35% rent increase in 2025 in the most contested micro-markets,” Susil Dungarwal, founder of retail advisory Beyond Squarefeet, said.
Blinkit, for example, is aiming to nearly double its store count to 2,000 by the end of 2025, one year earlier than it had initially planned. Flipkart’s quick commerce arm, Minutes, is also targeting a significant increase, from 300 to 800 stores this year. Zepto and Swiggy Instamart, which already operate more than 1,000 stores each, are continuing to add locations in the metros.
This aggressive rollout is being driven by consistently high volumes in the top 10–15 cities. A report by Redseer shows that non-metro areas contribute only around 20% of gross merchandise value in the sector, with orders per store dropping off quickly outside major urban clusters.
The result is intensified competition for dark store-ready sites in city centers and key residential corridors. In Bengaluru, for instance, average rents for ground-floor dark stores in areas like Domlur, Sarjapur Road and Thannisandra have jumped 30–40% in the past 18 months, according to Agarwal.
“In locations like Domlur, rents have increased from Rs 50 to Rs 75 per square foot, and some deals are being struck 40% above market rates,” he said, citing a recent Blinkit lease in Frazer Town at Rs 60 per square foot for an 1,800 sq ft space.
Industry POV
Industry insiders say landlords are increasingly fielding multiple offers for well-situated properties. “It’s common now for spaces to receive several proposals within a day, often with signing bonuses or advance rent for six months,” Agarwal said. “Platforms are moving faster than landlords can vet the paperwork,” he added.
As demand has surged, landlords are tightening lease terms. Security deposits have increased to 4–6 months’ rent in many cases, while lock-in periods are often limited to 9–12 months, allowing for greater flexibility.
“To lock in tenants, landlords increasingly request higher security deposits, sometimes 6 to 10 months, and shorter lease tenure of one to two years,” Dungarwal said. “Tenants, in turn, are negotiating trade-offs like funding interiors in exchange for lower rents or including performance-linked clauses.”
According to Agarwal, dark store rentals in prime city areas now range between Rs 80 and Rs 200 per square foot, compared to Rs 25 to Rs 60 for typical warehouse spaces within city limits.
While this upward pressure is expected to continue in the short term, experts suggest that the pace may eventually taper off. “In the next 6–12 months, rents are likely to stay elevated due to store rollout targets and limited availability,” said Agarwal. “But over 12–24 months, we may see some stabilisation as platforms shift focus from expansion to optimising existing networks.”
Dungarwal estimates that by FY26, the market could see between 5,000 to 5,500 operational dark stores. “As market capacity catches up with demand, rental growth may moderate, particularly if operators begin to consolidate and fine-tune their store density,” he said.