India's Industrial and Logistics Real Estate Sector Surges in H1 2025
The Industrial and Logistics (I&L) real estate sector in India witnessed a significant boom in the first half of 2025, driven by strategic asset-light models and a surge in Grade A facilities. Major demand was seen in cities like Bengaluru, Pune, NCR, Chennai, and Mumbai.
Industrial Real EstateLogisticsGrade A FacilitiesAssetlight ModelsMarket GrowthReal Estate NewsAug 19, 2025
This figure signifies a substantial 38% Year-on-Year increase compared to H1 2024, which registered 6.5 million square feet and is strikingly six times higher than the pre-pandemic levels recorded in H1 2019 with 1.6 million square feet. Infrastructure development maintains its upward trend, with Grade A warehousing facilities now comprising 55% of the total 463 million square feet stock across India's eight major cities.
The sector witnessed a net absorption of 25 million square feet in H1 2025, with projections for year-end expected to hit between 55 and 57 million square feet—a notable rise of 12 to 15% from the 50 million square feet absorbed in 2024. Occupiers increasingly prefer Grade A facilities, which account for 81% of total absorption, highlighting the market's shift toward higher-quality infrastructure.
Bengaluru, Pune, NCR Delhi, Chennai, and Mumbai accounted for a combined 90% of India's net demand in H1 2025. This six-fold increase in manufacturing leasing illustrates both market expansion and a strategic pivot towards asset-light models, as manufacturers opt for Grade A and build-to-suit spaces to overcome land acquisition challenges and expedite operations, explained Yogesh Shevade, Head of Industrial & Logistics, India, JLL.
The 3PL/Logistics sector leads in demand with 28%, followed closely by Manufacturing at 24%, spanning industries like Automotive, Engineering, Electronics, and White Goods. JLL notes that manufacturing companies are increasingly embracing asset-light strategies, optimizing capital while leveraging turnkey facilities with pre-secured regulatory approvals.
Manufacturing leasing is particularly concentrated in Pune and Chennai, cities that host a significant portion of India's Grade A industrial stock.
Frequently Asked Questions
What is the current leasing trend in India's Industrial and Logistics real estate sector?
The leasing trend in India's Industrial and Logistics real estate sector has seen a significant rise, with manufacturing space leasing reaching 9.0 million square feet in H1 2025, a 38% increase from H1 2024.
Why is there a preference for Grade A facilities in the sector?
Occupiers increasingly prefer Grade A facilities due to their higher quality infrastructure, which accounts for 81% of total absorption, highlighting a market shift towards better infrastructure.
Which cities are driving the demand in the I&L real estate sector?
Bengaluru, Pune, NCR Delhi, Chennai, and Mumbai are the key cities driving the demand, accounting for a combined 90% of India's net demand in H1 2025.
What are asset-light models, and why are they popular?
Asset-light models allow manufacturers to optimize capital by leasing Grade A and build-to-suit spaces, overcoming land acquisition challenges and expediting operations.
Which sectors are leading the demand in the I&L real estate market?
The 3PL/Logistics sector leads in demand with 28%, followed by Manufacturing at 24%, particularly in industries like Automotive, Engineering, Electronics, and White Goods.
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