India’s industrial and warehousing sector remained resilient through 2025, with demand across the top eight markets reaching 26.5 million sq ft during the first nine months — an 11 per cent year-on-year increase, according to a new report by Colliers India.

Despite global uncertainty and trade tensions, Grade A space uptake touched an all-time high, highlighting strong sector fundamentals and sustained occupier interest in key markets.

“Average quarterly leasing of Grade A facilities across major cities remained robust at around 9 million sq ft, underscoring continued resilience,” said Vijay Ganesh, Managing Director, Industrial & Logistics Services, Colliers India. He noted that large-scale deals accounted for nearly half of total leasing volumes in 2025, driven mainly by the 3PL and e-commerce sectors.

Sector Dynamics and Trends

While Q2 2025 recorded one of the strongest quarters on record, demand moderated in Q3 to 7 million sq ft, marking a 23 per cent year-on-year decline. However, festive-season consumption and higher demand from e-commerce and electronics are expected to boost leasing activity in Q4.

As in previous years, Delhi NCR, Chennai, and Mumbai collectively accounted for over 60 per cent of total leasing. Chennai and Delhi NCR each recorded over 5 million sq ft, while Mumbai followed with 4.2 million sq ft.

The 3PL segment dominated, contributing about one-third of total leasing, followed by engineering (20 per cent) and e-commerce (15 per cent). Notably, e-commerce saw a 2.5-fold increase in space take-up compared to last year, propelled by major deals in top submarkets.

Supply and Market Outlook

During the first nine months of 2025, new supply reached 28.8 million sq ft, a 6 per cent increase year-on-year. Delhi NCR, Chennai, and Mumbai contributed nearly two-thirds of this growth, indicating robust developer confidence.

Most new completions were recorded in NH-16 (Chennai), Bhiwandi (Mumbai), and Luhari and Farukh Nagar (Delhi NCR) — areas preferred for their connectivity and logistics infrastructure.

“Delhi NCR continues to lead the industrial and warehousing market, accounting for nearly one-third of total demand and supply, followed by Chennai and Mumbai,” said Vimal Nadar, National Director & Head of Research at Colliers India.

He added that Bhiwandi (Mumbai), Oragadam (Chennai), and Hoskote (Bengaluru) were the most active submarkets, collectively representing 30 per cent of total demand.

In Q3 2025, new completions rose to 9.4 million sq ft, outpacing demand and causing a 160-basis-point increase in vacancy levels. However, rents remained firm, supported by occupiers’ growing preference for high-quality, sustainable warehousing spaces.

Looking ahead, Colliers expects occupier demand to stay robust, backed by steady domestic consumption, a strong project pipeline, and an expanding base of institutional-grade assets.