India’s industrial and warehousing sector showcased strong resilience in 2025, with leasing activity touching 36.9 million sq ft across the top eight cities, marking a 16% year-on-year growth, according to a report by Colliers India.
The growth was largely propelled by large-ticket transactions, which accounted for 45% of total leasing demand, led predominantly by Third-Party Logistics (3PL) players. Delhi NCR and Chennai emerged as the standout markets, together contributing 46% of the annual leasing activity.
3PL operators continued to dominate the market with a 32% share of Grade A space uptake, while engineering and e-commerce sectors gained momentum, together accounting for 35% of the total demand during the year.
At the micro-market level, Bhiwandi in Mumbai led leasing activity with approximately 4.9 million sq ft of Grade A space uptake, followed by Chakan–Talegaon in Pune and Oragadam in Chennai, the report noted.
Quarterly trends reflected a strong finish to the year. After a subdued third quarter, Q4 2025 recorded around 10.4 million sq ft of leasing activity. Chennai and Pune together accounted for 56% of the quarterly demand, underlining their growing importance as industrial hubs.
Several high-profile transactions underscored the momentum, including Jabil Inc.’s 385,000 sq ft lease in Pune and DHL’s 380,400 sq ft deal in Chennai. The e-commerce segment displayed a clear preference for scale, with 61% of its quarterly uptake coming from large-format fulfillment centres. In contrast, FMCG and retail players focused on mid-sized warehouses, with over two-thirds of their deals aimed at supporting hyperlocal delivery models.
“Delhi NCR and Chennai each recorded over 8 million sq ft of demand in 2025, collectively contributing more than 45% of the leasing activity,” said Vimal Nadar, National Director & Head, Research, Colliers India. “Markets such as Pune and Mumbai also saw space uptake of around 5 million sq ft each. With strong manufacturing clusters and superior infrastructure connectivity, we expect these four markets to cumulatively account for 70–80% of industrial and warehousing demand in 2026 as well.”
On the supply side, developers added 41.7 million sq ft of new space in 2025, reflecting a 15% annual increase. Delhi NCR led construction activity, contributing 30% of the new supply. Supply peaked in Q4 2025, with 13 million sq ft of completions, representing a sharp 40% jump year-on-year for the quarter.
Despite the significant supply influx, vacancy levels remained stable at around 16%, as demand continued to outstrip new additions in high-activity logistics clusters. The competitive environment resulted in average rental growth of 5–10% across key markets.
Looking ahead, established hubs such as Delhi NCR, Chennai, Mumbai, and Pune—currently dominated by 3PL and engineering firms—are expected to remain the primary growth engines. With developers maintaining a positive outlook and large-scale leasing deals becoming increasingly common, India’s industrial and warehousing sector appears poised for sustained expansion in 2026 and beyond.
