Warehousing leasing hits 16.7 million sq ft, driven by manufacturing

09 May 2025 CW Team

India’s warehousing sector witnessed robust growth in Q1 2025, with total leasing activity across the top eight markets touching 16.7 million sq ft—a fifty per cent year-on-year rise, according to a report by Knight Frank India. The manufacturing sector largely led the surge, which saw a ninety-four per cent jump in leasing volumes, accounting for 8 million sq ft or 48 per cent of total demand.

E-commerce players recorded a one hundred fifty-one per cent YoY increase in space uptake, marking a revival in expansion plans. Leasing by 3PL firms rose twelve per cent YoY but their share dropped to 23 per cent, reflecting changing market dynamics.

Mumbai emerged as the top performer with 4.4 million sq ft of leasing, or 27 per cent of total volumes, followed by Pune, Chennai, and NCR. Chennai and Hyderabad posted the highest YoY growth at 154 per cent and 137 per cent, respectively.

Grade A warehousing remained dominant, making up 59 per cent of total transactions and 65 per cent of the new 9.6 million sq ft supply. Occupiers increasingly preferred facilities with high efficiency, ESG compliance, and automation readiness.

India’s total warehousing stock stands at 495 million sq ft. Mumbai accounts for 31 per cent, while NCR follows with 22 per cent. Vacancy levels remained healthy at 11.3 per cent in Q1 2025, with Grade A spaces recording slightly higher vacancies due to strong development interest.

Photo: Knight Frank India

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