India’s warehousing sector has experienced a significant surge in leasing activity, with 16.7 million square feet transacted in the first quarter of 2025, marking a 50% year-on-year increase.
This robust growth underscores the sector’s resilience and its pivotal role in supporting the nation’s economic expansion. The manufacturing sector has been a primary driver of this growth, accounting for 48% of the total leasing volume. This uptick is attributed to the ongoing ‘China+1’ strategy, where global companies are diversifying their supply chains, and India’s ‘Make in India’ initiative, which has bolstered domestic production capabilities.
E-commerce has also shown a remarkable resurgence, with leasing volumes increasing by 151% compared to the same period last year. This rebound reflects the sector’s recovery from previous slowdowns and its adaptation to evolving consumer demands. Third-party logistics (3PL) providers, while still significant, have seen a 12% increase in leasing volumes, contributing to 23% of the total demand. This shift indicates a diversification in the occupier base, with manufacturing and e-commerce sectors gaining prominence.
Geographically, Mumbai led the leasing activity, accounting for 27% of the total transactions, followed by Pune, Chennai, and the National Capital Region (NCR), each contributing approximately 16-17%. Pune’s dominance is attributed to its status as the most expensive warehousing rental market in the country, driven by the automotive industry’s demand. The demand for Grade A warehousing facilities remains strong, comprising 59% of all transactions. These facilities are preferred for their compliance with fire safety norms and operational efficiency, aligning with the growing emphasis on environmental, social, and governance (ESG) standards.
Industry experts highlight that the warehousing sector’s growth is not merely a reflection of increased demand but also a testament to India’s evolving logistics infrastructure. Initiatives such as the National Logistics Policy and the development of multimodal logistics parks are expected to further enhance the sector’s capabilities. In conclusion, India’s warehousing sector is poised for sustained growth, driven by strategic investments and a diversified occupier base. As the nation continues to strengthen its position as a logistics and industrial powerhouse, the warehousing sector will play a crucial role in supporting this trajectory.
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