Manufacturing Boom Drives Surge in Industrial Real Estate Demand

04 Dec 2025 CW Team

Demand for Grade A facilities has grown consistently, increasing from 70 per cent in 2019 to 82 per cent in 2024 and further to 87 per cent through Q3 2025. The shift reflects rising requirements for customised, high-specification buildings driven by the Auto and Ancillaries, Electronics and White Goods, and Engineering sectors. Modern facilities now emphasise stringent hygiene norms, green building features and comprehensive safety compliance—characteristics that set them apart from traditional logistics spaces.

As of Q3 2025, Pune and Chennai accounted for nearly 75 per cent of manufacturing leasing demand in Tier I cities, with Bengaluru, Mumbai and NCR also witnessing rapid growth. Yogesh Shevade, Head of Industrial and Logistics, India, JLL, said the seven-fold rise in leasing between 2020 and 2024 reflects manufacturers’ preference for leased Grade A facilities that support automation, stronger infrastructure and sustainable operations.

Manufacturers are also adopting lease-first strategies to improve capital efficiency. Ready-built and built-to-suit leased facilities offer capex-light options, enabling companies to focus on core operations while gaining access to fully equipped sites. From 2019 to Q3 2025, over 76 per cent of ready-built facility demand was concentrated in Pune, Chennai and NCR due to faster move-in timelines.

Grade A light manufacturing rentals across major cities have recorded steady appreciation over the past five years, with expected annual growth of 4–6 per cent driven by rising demand from engineering, auto and electronics sectors. Rental premiums remain strong compared to standard warehouse spaces due to the higher specifications and compliance requirements of manufacturing facilities.

Manufacturing space demand is expected to reach nearly 34 million sq ft by 2027, representing 46 per cent of India’s total industrial and warehousing absorption and reinforcing the sector’s strengthening market dominance.

"Join industry leaders at RAHSTA Expo, India's premier platform for roads, highways and traffic infrastructure. Register now to explore innovations, network with experts and shape the future of mobility."

India’s manufacturing sector is reshaping the industrial real estate market with strong leasing momentum and evolving facility requirements. Manufacturing leasing activity reached 22.1 million sq ft in 2024 and is projected to rise to around 33.7 million sq ft by 2027 across the top eight cities, accounting for nearly half of the country’s total industrial and warehousing absorption, according to JLL’s report ‘From Make in India to Made by India: Advanced Manufacturing Real Estate Lifecycle’.Demand for Grade A facilities has grown consistently, increasing from 70 per cent in 2019 to 82 per cent in 2024 and further to 87 per cent through Q3 2025. The shift reflects rising requirements for customised, high-specification buildings driven by the Auto and Ancillaries, Electronics and White Goods, and Engineering sectors. Modern facilities now emphasise stringent hygiene norms, green building features and comprehensive safety compliance—characteristics that set them apart from traditional logistics spaces.As of Q3 2025, Pune and Chennai accounted for nearly 75 per cent of manufacturing leasing demand in Tier I cities, with Bengaluru, Mumbai and NCR also witnessing rapid growth. Yogesh Shevade, Head of Industrial and Logistics, India, JLL, said the seven-fold rise in leasing between 2020 and 2024 reflects manufacturers’ preference for leased Grade A facilities that support automation, stronger infrastructure and sustainable operations.Manufacturers are also adopting lease-first strategies to improve capital efficiency. Ready-built and built-to-suit leased facilities offer capex-light options, enabling companies to focus on core operations while gaining access to fully equipped sites. From 2019 to Q3 2025, over 76 per cent of ready-built facility demand was concentrated in Pune, Chennai and NCR due to faster move-in timelines.Grade A light manufacturing rentals across major cities have recorded steady appreciation over the past five years, with expected annual growth of 4–6 per cent driven by rising demand from engineering, auto and electronics sectors. Rental premiums remain strong compared to standard warehouse spaces due to the higher specifications and compliance requirements of manufacturing facilities.Manufacturing space demand is expected to reach nearly 34 million sq ft by 2027, representing 46 per cent of India’s total industrial and warehousing absorption and reinforcing the sector’s strengthening market dominance.

Real Estate

07 Jul 2026

Pecan Realty Completes Rs 1.5 Billion Transactions

Pecan Realty has recently completed four institutional transactions worth over Rs 1.5 billion over the past two years, strengthening its position as an execution-led real estate platform. The deals include resolution-led acquisitions, structured finance transactions and capital partnerships across its development portfolio.The transactions covered acquisitions through the National Company Law Tribunal process and helped provide repayment or exits to both private and public sector lenders. The company said the deals demonstrate its ability to resolve complex project situations, work with instit..

Real Estate

07 Jul 2026

SNN Estates Expands North Bengaluru Housing Project

SNN Estates has announced an expansion of its SNN Estates Felicity residential project in North Bengaluru following strong buyer demand, with 75 per cent of the first-phase inventory sold within three days of launch.The developer will add 76 apartments in the new phase, taking the project's estimated revenue potential to around Rs 1,000 crore upon completion of Phase 2.Spread across 6.5 acres in Rachenahalli, near Manyata Tech Park, the project comprises 604 apartments in 1.5, 2, 2.5, 3 and 4 BHK configurations. The development includes a 50,000-sq-ft clubhouse with amenities such as sports co..

Infrastructure Urban

07 Jul 2026

SCG Drives ASEAN Industrial Transformation Strategy

SCG is strengthening its focus on ASEAN as a key growth region by advancing industrial transformation, enhancing competitiveness and building resilient regional value chains. Thammasak Sethaudom, President and Chief Executive Officer, SCG, highlighted the need for industries to continuously develop capabilities, strengthen resilience and deepen regional cooperation to achieve sustainable long-term growth.SCG views ASEAN as an important growth engine alongside China, supported by favourable demographics, trade connectivity and investment flows. With ASEAN’s GDP projected to grow by around 4.7..