Industrial & Warehousing Demand Soars in Top Indian Cities
The industrial and warehousing sector in India witnessed a robust 33% YoY growth in demand during the first half of 2025, with Delhi NCR, Chennai, Mumbai, and Bengaluru leading the way. Third-party logistics (3PL) firms accounted for a significant portion of the leasing activity.
Industrial DemandWarehousingReal Estate3plIndiaReal Estate MumbaiJul 21, 2025
During the first half of 2025, the industrial and warehousing sector in India saw a remarkable surge in demand, with approximately 20 million square feet (mn sq ft) of leasing activity, marking a 33% year-over-year (YoY) increase. This robust growth was primarily driven by the top eight cities, with Delhi NCR and Chennai leading the charge, collectively accounting for about half of the overall leasing.
Key Cities Driving Demand
Among the top eight cities, Delhi NCR, Chennai, Mumbai, and Bengaluru stood out, each recording an impressive demand of at least 2 mn sq ft during the first half of the year. Third-party logistics (3PL) firms were the primary drivers of space uptake, contributing to about 32% of the overall demand. Other significant occupier segments included engineering, e-commerce, automobile, and retail firms, which also saw a significant rise in demand.
Micro Market Trends
At the micro market level, Bhiwandi in Mumbai led the way with the highest warehousing space uptake at 3.1 mn sq ft, followed by Oragadam in Chennai at 1.5 mn sq ft. These micro markets are crucial for understanding the specific areas where industrial and warehousing activities are most concentrated.
Strong Quarterly Performance
The second quarter of 2025 was particularly noteworthy, with a 52% YoY increase in demand, reaching about 11 mn sq ft of leasing activity across the top eight cities. Delhi NCR alone accounted for around one-fourth of the quarterly demand, with significant space uptake in Farukhnagar and Kulana micro markets.
Diverse Occupier Segments
While 3PL players continued to dominate demand, other segments such as engineering, e-commerce, and automobile also saw notable increases. Each of these segments accounted for 2-4 mn sq ft of space take-up during H1 2025. This diverse demand reflects the sector's resilience and aligns with the broad-based growth prospects in the domestic economy.
Large-Sized Deals
Large deals (over 200,000 sq ft) accounted for about half of the gross leasing activity during H1 2025. Delhi NCR and Mumbai were the leading cities for these large-sized deals, indicating a strong preference for large, high-quality warehousing facilities.
New Supply and Developer Confidence
The first six months of 2025 also saw a significant new supply of 19 mn sq ft, a 11% YoY increase. This supply was almost in line with the strong leasing activity, signaling improved developer confidence in the industrial and warehousing market. Delhi NCR and Chennai contributed the most to the new supply, cumulatively accounting for close to half of the new supply across the top eight cities.
Future Outlook
The industrial and warehousing sector is expected to maintain its strong performance through the rest of 2025, with new supply expected to reach about 35-40 mn sq ft by the end of the year. The sector's resilience and diverse demand base set a strong foundation for continued growth and development.
About Colliers
Colliers (NASDAQ: CIGI) (TSX: CIGI) is a leading global diversified professional services company specializing in commercial real estate services, engineering consultancy, and investment management. With operations in 70 countries and 22,000 enterprising professionals, Colliers provides exceptional service and expert advice to clients. For nearly 30 years, the company has consistently delivered approximately 20% compound annual investment returns for shareholders. With annual revenues exceeding $4.5 billion and $99 billion of assets under management, Colliers maximizes the potential of property, infrastructure, and real assets to accelerate the success of clients, investors, and people.
Frequently Asked Questions
What cities led the industrial and warehousing demand in H1 2025?
Delhi NCR and Chennai led the industrial and warehousing demand in H1 2025, collectively accounting for about half of the overall leasing activity.
Which occupier segments were the primary drivers of demand in H1 2025?
Third-party logistics (3PL) firms were the primary drivers, contributing to about 32% of the overall demand. Other significant occupier segments included engineering, e-commerce, automobile, and retail firms.
What was the total new supply in H1 2025 and how did it compare to the previous year?
The total new supply in H1 2025 was 19 mn sq ft, marking an 11% YoY increase.
Which micro market saw the highest warehousing space uptake in H1 2025?
Bhiwandi in Mumbai saw the highest warehousing space uptake at 3.1 mn sq ft.
What is the expected new supply by the end of 2025?
The new supply is expected to reach about 35-40 mn sq ft by the end of 2025.
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