India’s manufacturing sector is rapidly reshaping the industrial real estate landscape, with leasing activity projected to reach 33.7 million square feet by 2027 across the top eight cities, according to a new report released by JLL on Wednesday. This would account for nearly half of India’s total industrial and warehousing absorption, underscoring the sector’s growing dominance.
The report highlights a remarkable surge in demand, with manufacturing leasing activity rising to 22.1 million sq ft in 2024. Forecasts indicate the requirement could climb to 34 million sq ft by 2027, representing 46% of the country’s total industrial and warehousing space absorption.
A notable trend driving this momentum is the shift toward Grade A facilities, which cater to advanced automation, robust infrastructure, and sustainability needs. Grade A space share jumped from 70% in 2019 to 82% in 2024, and further to 87% by Q3 2025 in key metro markets.
“The seven-fold increase in manufacturing leasing activity between 2020 and 2024 indicates a growing shift of manufacturers’ real-estate strategy and decision-making in choosing leased land and building,” said Yogesh Shevade, Head of Industrial and Logistics, India, JLL. He added that Grade A facilities have become the preferred choice due to their ability to support high-end specifications and a sustainable, compliant ecosystem.
Demand is being fuelled by sectors such as automobiles and ancillaries, electronics and white goods, and engineering, each requiring customised, technologically advanced spaces. Modern manufacturing facilities are also increasingly emphasising enhanced hygiene, sustainable building features, and comprehensive safety compliance.
Among the top eight Tier I cities, Pune and Chennai have emerged as the strongest markets, jointly accounting for 75% of the manufacturing leasing demand as of Q3 2025. Other metros such as Bengaluru, Mumbai, and Delhi-NCR are also witnessing significant growth, further accelerating the nationwide leasing momentum.
The report signals a structural transformation in India’s manufacturing real estate strategy, driven by rising demand, evolving operational needs, and the push toward global-standard infrastructure.
