India Industrial And Warehousing Demand At All Time High In H1 2025
India’s industrial and warehousing sector experienced an all-time high in demand during the first half of 2025, recording approximately 20 million square feet of leasing activity. This represents a robust 33 percent year-on-year growth across the top eight cities, indicating a strong and resilient economic environment. Delhi-NCR and Chennai spearheaded this surge, collectively accounting for about half of the total leasing, highlighting their strategic importance in the country’s logistics and industrial landscape. This sustained momentum is expected to continue, reinforcing India’s position as a burgeoning hub for manufacturing and distribution.
The robust demand was evident across major urban centers, with Delhi-NCR, Chennai, Mumbai, and Bengaluru each registering impressive leasing activity of at least 2 million square feet during H1 2025. Third-Party Logistics (3PL) players continued to be the primary drivers, contributing approximately 32 percent of the overall demand for Grade A warehouses and industrial sheds. Beyond 3PL, significant space uptake was observed from diverse occupier segments, including engineering, e-commerce, automobile, and retail firms, all showing substantial growth. At a more granular level, Mumbai’s Bhiwandi micro-market led in warehousing space absorption at 3.1 million square feet, followed by Chennai’s Oragadam with 1.5 million square feet, underscoring the granular growth.
The second quarter of 2025 specifically witnessed approximately 11 million square feet of demand across the top eight cities, marking a substantial 52 percent year-on-year increase. This quarterly performance represented the highest gross absorption recorded in the industrial and warehousing sector in recent years, signaling strong market confidence. An industry expert from a leading real estate consulting firm noted that this growth momentum is likely to persist in the upcoming quarters, setting the stage for an exceptionally strong performance throughout 2025. While 3PL players continue their dominance, the increasing traction from engineering, e-commerce, and automobile segments, each contributing significantly (10-20 percent of Grade A space uptake), reflects a healthy diversification of demand.
The record-breaking demand in India’s industrial and warehousing sector during H1 2025 underscores robust economic activity and increased logistical efficiency. This sustained growth, propelled by diverse segments and key metropolitan hubs, signals a positive trajectory for modern infrastructure development, cementing India’s role as a dynamic market for industrial and warehousing investments.
