India’s industrial and warehousing sector experienced a 33% year-on-year growth in H1 2025, with leasing activity reaching approximately 20 million sq ft across the top eight cities. Delhi NCR and Chennai emerged as the leading markets, accounting for nearly half of the total leasing volume during the first half of the year. Third Party Logistics (3PL) players continued to dominate the sector, accounting for around one-third of the leasing activity. Demand from most occupier segments, including 3PL, engineering, e-commerce, automobile, and retail firms, rose significantly during H1 2025.
In Q2 2025, the industrial & warehousing sector saw about 11 million sq. ft of demand across the top eight cities, a 52% YoY increase. Delhi NCR drove around one-fourth of the quarterly demand at 2.5 Mn sq. ft of Grade A space uptake. The growth momentum is likely to remain unabated in the forthcoming quarters, setting the stage for a strong performance in 2025. Large-sized deals accounted for about half of the demand, with Delhi NCR and Mumbai dominating large-sized deals during H1 2025. New supply also remained strong in H1 2025, rising by 11% on an annual basis. Delhi NCR and Chennai accounted for the bulk of new supply during H1 2025, contributing close to half of the new supply across the top eight cities.
Knight Frank India – Warehousing
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Strong Growth in H1 2025
India’s industrial and warehousing sector witnessed a remarkable 33% year-on-year increase in leasing activity, touching nearly 20 million sq. ft. in the first half of 2025. This substantial rise reflects the sector’s resilience, growing demand from e-commerce and third-party logistics players, and continued investor confidence in the country’s industrial infrastructure. According to property consultants, this is one of the highest half-yearly absorption volumes recorded in the past three years…(India’s logistics).
Top Contributing Cities
Major cities like Delhi-NCR, Mumbai, Bengaluru, Pune, and Hyderabad dominated leasing volumes, together contributing over 75% of the total. Delhi-NCR led the chart with strong interest from 3PL firms and FMCG players, while Mumbai saw a revival in demand from light manufacturing and pharma sectors. Tier-2 cities such as Lucknow, Coimbatore, and Indore also saw early signs of activity as companies look to de-risk supply chains.
Sector-Wise Demand Analysis
Third-party logistics (3PL) providers remained the biggest occupiers, accounting for over 40% of the total space leased. This was followed by e-commerce, retail, and manufacturing sectors. The rise of same-day delivery models, fast-moving inventory needs, and automated warehousing has further pushed demand for Grade-A spaces with better connectivity and digital infrastructure. The expansion of Quick Commerce and regional distribution hubs played a pivotal role.
Supply Side and Developer Activity
On the supply side, nearly 18 million sq. ft. of new warehousing stock was added in H1 2025, most of it in the form of green-certified and tech-enabled facilities. Leading developers have scaled up land acquisitions to meet growing requirements. Institutional investors, including global funds, have shown renewed interest, with several joint ventures and REIT-backed projects announced this year. This signals a maturing asset class that’s attracting long-term capital.
Policy Support and Infrastructure Boost
Government-led infrastructure programs such as the PM Gati Shakti Master Plan, freight corridor expansion, and warehousing zoning reforms have also contributed to the sector’s momentum. Easier clearances, GST implementation, and multimodal logistics parks have significantly improved business viability and regional accessibility. These policy measures are helping build an integrated logistics ecosystem.
Outlook for the Rest of 2025
Industry experts forecast continued growth in the second half of 2025, with total leasing likely to surpass 40 million sq. ft. for the full year. While global macroeconomic uncertainties remain, India’s domestic consumption, manufacturing push, and evolving retail models will keep the warehousing sector buoyant. Developers and occupiers alike are expected to focus more on sustainability, automation, and flexible warehousing strategies going forward.
q1. What is the total industrial and warehousing leasing in H1 2025?
It reached approximately 20 million sq. ft., marking a 33% YoY growth.
q2. Which cities led the leasing activity?
Delhi-NCR, Mumbai, Pune, Bengaluru, and Hyderabad were the top contributors.
q3. Which sectors drove the highest demand?
Third-party logistics (3PL), e-commerce, retail, and manufacturing led the demand.
q4. What factors contributed to this growth?
Rising e-commerce, policy reforms, improved infrastructure, and investor confidence boosted the sector.
q5. What is the outlook for the rest of 2025?
Leasing is expected to surpass 40 million sq. ft. by year-end, driven by strong domestic demand.
