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In 2025, India's industrial and warehousing sector demonstrated remarkable resilience, with leasing activity reaching 36.9 million sq ft across the top eight cities, marking a 16% year-on-year growth, as per a report by Colliers India.
This surge was primarily driven by large-ticket transactions, which accounted for 45% of the total demand, particularly from Third-Party Logistics (3PL) providers. Delhi NCR and Chennai emerged as the primary engines of this growth, collectively contributing 46% of the annual leasing activity. While 3PL players maintained their dominance with a 32% share of the total Grade A space uptake, segments such as engineering and e-commerce also gained significant traction, cumulatively making up 35% of the year's demand. "At a micro market level, Bhiwandi in Mumbai led the leasing activity in 2025 with about 4.9 million sq ft of Grade A space uptake, followed by Chakan-Talegaon in Pune and Oragadam in Chennai", the report stated. " On a quarterly basis, after a relatively modest third quarter, Q4 2025 saw about 10.4 million sq ft of industrial & warehousing demand. Chennai, closely followed by Pune, cumulatively accounted for 56% of the quarterly demand", the report added. Specific high-profile transactions highlighted this momentum, such as Jabil Inc.'s 385,000 sq ft lease in Pune and DHL's 380,400 sq ft uptake in Chennai. Interestingly, the e-commerce sector showed a preference for massive fulfillment centers, with 61% of its quarterly uptake coming from large-scale deals. Conversely, the FMCG and retail segments focused on agility, with over two-thirds of their deals falling into the mid-sized category to support the rise of hyperlocal delivery services. "Delhi NCR and Chennai each recorded over 8 million sq ft of demand in 2025, collectively contributing over 45% of the leasing activity. Concurrently, markets like Pune and Mumbai saw space uptake of around 5 million sq ft each. The demand for Grade A warehouses across these four primary industrial hubs was predominantly driven by 3PL and engineering firms. With well-established manufacturing clusters and superior infrastructure connectivity, we expect these markets to cumulatively account for 70-80% of industrial & warehousing demand in 2026 as well", says Vimal Nadar, National Director & Head, Research, Colliers India. On the supply side, developers responded to the robust demand with an impressive 41.7 million sq ft of new completions in 2025, representing a 15% annual increase. Delhi NCR led the construction activity, contributing 30% of the year's new supply. This surge in development reached a peak in Q4 2025, which saw 13 million sq ft of new space enter the market, a staggering 40% jump from the previous year's final quarter. Despite this influx of supply, vacancy levels remained stable at approximately 16% as demand continued to outpace new additions in high-activity micro-markets. This competitive environment led to a rise in average rentals by 5-10% in prominent logistics clusters. Established hubs like Delhi NCR, Chennai, Mumbai, and Pune--which are currently dominated by 3PL and engineering firms--are projected to remain the primary drivers of the market, likely accounting for 70-80% of the total demand in 2026. With developers maintaining an upbeat outlook and large-scale deals becoming more frequent, the industrial and warehousing landscape in India appears set for sustained expansion. (ANI)
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