Industrial & warehousing demand at all-time high, 20 million sq. ft. in H1 2025

The industrial and warehousing sector in India showcased significant momentum during H1 2025, with Delhi NCR and Chennai emerging as frontrunners, contributing nearly half of the 20 million sq. ft. leased. The sector recorded a 33% YoY growth, with Q2 alone witnessing 11 million sq. ft. of leasing activity, marking the highest quarterly gross absorption in recent years. Delhi NCR dominated this quarter, driven by large-scale uptake in Farukh Nagar and Kulana. Third-Party Logistics (3PL) firms remained the main contributors, accounting for 32% of total demand, while engineering, e-commerce, and automobile industries followed closely with substantial space uptake between two and four million sq. ft each. Notably, Grade A warehousing spaces formed the bulk of leasing transactions, reflecting occupier preference for quality infrastructure.
Supply-side dynamics also stayed strong, with developers infusing 19 million sq. ft of new space during H1 2025, an 11% rise YoY. The April–June period alone accounted for 10 million sq. ft of completions, recording the highest quarterly supply addition in several quarters. Delhi NCR and Chennai continued to lead new developments, collectively contributing to half of this supply. Around 50% of the leasing deals were large-scale transactions over 2,00,000 sq. ft, especially concentrated in Delhi NCR and Mumbai. With overall vacancy holding steady at 13.5%, rents in key micro-markets surged due to sustained demand and the infusion of high-quality spaces equipped with advanced features. Experts anticipate continued growth in the sector, backed by broad-based demand and resilient performance across diverse occupier segments. Developers are likely to expand Grade A capacity further, projecting total new supply to reach 35–40 million sq. ft by the end of 2025.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.