“Explosive Growth in India’s Logistics Leasing: 27.1 Mn Sq. Ft. Achieved in H1 2025 – CBRE”

India’s Industrial & Logistics (I&L) leasing sector experienced a 63% YoY surge in H1 2025, reaching an all-time high of 27.1 million sq. ft. The growth was largely driven by e-commerce, with e-commerce leasing more than doubled its share from 9% in H1 2024 to 25% in H1 2025. The Engineering and manufacturing (E&M) sector also saw a slight increase, rising from 18% in H1 2024 to 19% in H1 2025. In Q2 2025, I&L leasing saw an 86% YoY increase to 14.6 Mn. sq. ft., with the third-party logistics (3PL) sector accounting for the highest share at 33%. Corporates from the APAC, Americas, and EMEA regions also contributed to the leasing sector, accounting for 43% of total leasing.

The next wave of growth is expected to be defined by premium, sustainable, and tech-enabled facilities, along with accelerated expansion into tier-II cities. India’s industrial and logistics (I&L) real estate market has achieved a significant milestone, with leasing activity hitting a record 27.1 million sq. ft. during the first half of 2025, according to CBRE. This marks the highest-ever leasing volume recorded in any H1 period, reflecting a surge in demand from third-party logistics (3PL), e-commerce, manufacturing, and retail sectors. (Real Estate).

Major Demand Drivers in H1 2025

CBRE’s report identifies the top contributors to the leasing spike:

• 3PL and E-commerce: These two segments accounted for over 55% of total leasing volume. Increased online retail activity and demand for last-mile delivery hubs have accelerated warehousing requirements.
• Manufacturing Growth: With the government’s push for Make in India, domestic manufacturing has seen a rise, boosting demand for both industrial and storage spaces.
• Retail and FMCG: Consumer goods companies continue to expand their supply chains, particularly in Tier I and II cities. by (CBRE India)

Supply Trends and New Completions

In addition to record leasing, the market also witnessed 20 million sq. ft. of new completions, indicating strong developer confidence and a robust pipeline. Grade A warehousing stock now makes up a significant portion of new supply, with occupiers increasingly demanding better infrastructure, safety, and compliance. Sustainable warehousing is also on the rise, with developers incorporating green building certifications, solar panels, and energy-efficient systems.

Regional Highlights

• Delhi-NCR led with nearly 30% of total leasing, driven by large 3PL requirements and strong infrastructure.
• Bangalore and Mumbai followed closely, benefiting from demand in both intra-city and intercity distribution hubs.
• Tier II cities such as Lucknow, Coimbatore, and Jaipur are also emerging as warehousing hotspots due to better connectivity and lower land costs.

Outlook for H2 2025 and Beyond

CBRE expects the I&L segment to maintain strong momentum in H2 2025, supported by sustained e-commerce activity, omni-channel retail growth, and policy incentives like the PLI scheme. Increased investor interest in logistics-focused real estate investment trusts (REITs) and infrastructure funds is also likely to fuel further development. Digital technologies such as warehouse automation, AI-based inventory systems, and predictive analytics are becoming key differentiators for occupiers.

Conclusion: A Landmark Moment for I&L Leasing

The record 27.1 million sq. ft. of leasing activity in H1 2025 marks a historic high for India’s industrial and logistics sector. As supply chains evolve and businesses focus on agility and efficiency, the sector is poised for continued expansion—firmly positioning India as a regional logistics hub.