Delhi NCR’s warehousing market witnessed a marked correction in the first half of 2025, with average rentals slipping by 10 per cent to ₹21 per square foot per month, according to industry estimates. The decline reflects a shift in leasing patterns, where nearly 60 per cent of agreements were struck below the city’s average market rate.
Sector specialists attribute the drop to competitive pricing pressures, as developers and landlords sought to attract large-format occupiers in a challenging economic climate. While demand for warehousing space remains steady, the pricing trend suggests a recalibration in a market previously buoyed by strong e-commerce and third-party logistics activity.Across India’s top seven cities, warehousing rentals largely remained in the ₹18–31 per square foot range. Pune emerged as the costliest market at ₹31 per square foot, driven by sustained demand from automotive, engineering, and manufacturing sectors, registering a year-on-year rise of 13 per cent. At the other end, the Mumbai region saw rentals at ₹18 per square foot, with a marginal annual decline of 2 per cent.
Other major hubs showed mixed trends. Hyderabad’s rentals edged up by 1 per cent to ₹19 per square foot, while Bengaluru saw a 5 per cent annual drop to the same level. Chennai reported a modest 2 per cent increase to ₹25 per square foot, and Kolkata recorded an 8 per cent jump to ₹21 per square foot, underlining region-specific demand dynamics.
Despite steady leasing volumes, investments in warehousing assets plummeted. The sector saw just USD 32 million in inflows in the first half of 2025 a sharp 98 per cent drop compared to last year. Analysts point to investor caution amid economic uncertainty, rising borrowing costs, and evolving demand in Tier-2 and Tier-3 cities.According to infrastructure planners, initiatives such as the Gati Shakti master plan, along with the expansion of multimodal logistics networks, are expected to underpin long-term growth. Authorities are also emphasising the need for greener, more efficient warehousing solutions from solar-powered facilities to AI-driven inventory systems to align with India’s sustainable development goals.While Delhi NCR’s short-term rental decline reflects a market adjustment, industry experts believe the region’s strategic location, connectivity, and evolving supply chain ecosystem will continue to attract occupiers. The challenge, they say, lies in balancing affordability with quality, and in ensuring that future warehousing infrastructure meets the twin demands of operational efficiency and environmental responsibility.
