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India’s industrial and warehousing sector continued to show remarkable strength in 2025, even amid global trade uncertainties. According to data from Colliers India, cumulative demand across the country’s top eight markets touched 26.5 million sq. ft in the first nine months of the year, an 11% increase compared to 2024.
Much of this demand came from Grade A facilities, which saw record leasing activity during the period. The numbers highlight that India’s warehousing story remains robust, driven by strong domestic consumption, e-commerce growth, and continued interest from occupiers across industries.
Q3 Sees Slight Slowdown After Record Performance
After one of its best quarters in Q2 2025, the market saw a modest cooling in the July–September period. Total space leased during the quarter dropped to 7 million sq. ft, reflecting a 23% year-on-year decline.
However, industry experts believe this slowdown is temporary. With the ongoing festive season and rising warehouse demand from e-commerce and electronics sectors, leasing activity is expected to pick up again in the final quarter of 2025.
Delhi NCR, Chennai, and Mumbai Dominate
The Delhi NCR, Chennai, and Mumbai regions remained the top-performing markets, together accounting for over 60% of total leasing during the first nine months of the year.
Both Chennai and Delhi NCR recorded over 5 million sq. ft of leasing each, followed closely by Mumbai with 4.2 million sq. ft. These cities continue to attract occupiers due to their strong infrastructure, connectivity, and proximity to large consumer bases.
Who’s Leasing: 3PL and E-commerce Lead the Way
Among the different occupier categories, Third-Party Logistics (3PL) players continued to dominate India’s warehousing landscape, contributing to nearly one-third of the total leased space.
The engineering sector followed with a 20% share, while e-commerce companies accounted for 15%. Interestingly, the e-commerce segment’s space take-up in 2025 was 2.5 times higher than last year, fuelled by large-scale leasing in key micro-markets as companies prepared for rising online sales.
“The average quarterly leasing of Grade A facilities across the top cities has stayed strong at around 9 million sq. ft in 2025,” said Vijay Ganesh, Managing Director, Industrial & Logistics Services at Colliers India. “Large deals have driven nearly half of the leasing volumes this year, particularly in the 3PL and e-commerce segments. With the festive season ahead, we expect demand to accelerate in the final quarter.”
New Supply Surpasses Demand
The first nine months of 2025 also saw new supply touching 28.8 million sq. ft, up 6% year-on-year. Delhi NCR, Chennai, and Mumbai once again led the way, contributing nearly two-thirds of all new completions.
Most of this new stock came up in high-demand micro-markets such as NH 16 in Chennai, Bhiwandi in Mumbai, and Luhari and Farukh Nagar in Delhi NCR - locations known for their strong logistics networks and easy access to highways and ports.
According to Vimal Nadar, National Director & Head of Research at Colliers India, “Delhi NCR continues to lead India’s industrial and warehousing market, accounting for almost a third of total demand and supply. Chennai and Mumbai follow closely. Micro-markets like Bhiwandi, Oragadam, and Hoskote have been particularly active this year, making up about 30% of total leasing activity.”
He added that while 3PL and e-commerce players remain major drivers in Delhi NCR and Mumbai, engineering occupiers dominate Chennai, thanks to the city’s strong manufacturing base.
Slight Rise in Vacancies, But Rentals Stay Firm
During Q3 2025, new completions outpaced leasing, with 9.4 million sq. ft of fresh supply entering the market. This caused a 160-basis-point rise in vacancy levels, but rentals in prime micro-markets continued to edge higher.
Experts attribute this to a growing ‘flight to quality’, a trend where occupiers prefer modern, sustainable, and well-located Grade A warehouses even at a premium cost.
Outlook: Strong Finish Expected for 2025
Despite global trade headwinds and short-term moderation, India’s industrial and warehousing sector remains on solid footing. Sustained domestic consumption, steady e-commerce demand, and a robust pipeline of under-construction projects are expected to keep leasing activity healthy.
As Ganesh summed up, “The fundamentals of India’s warehousing sector are strong. With the festive season underway and large occupiers expanding, we expect a solid finish to what has already been a resilient year.”
