India’s industrial & warehousing sector has continued to display resilience in 2025, with cumulative demand across the top eight markets reaching 26.5 million sq ft in the first nine months, marking an 11 per cent year-on-year growth. In fact, Grade A space uptake was at an all-time high in the nine-month period, despite global players remaining cautious amidst ongoing trade frictions. The sustained momentum also underscores the sector’s strong fundamentals and continued occupier interest across key industrial & warehousing markets, says a Colliers India report.
However, following one of the best-performing quarters on record in Q2 2025, demand moderated in the third quarter to 7 million sq ft, reflecting a 23 per cent y-o-y decline. Nevertheless, the ongoing festive season and a surge in warehousing requirements on account of higher e-commerce and electronics sales in the last quarter can push the demand in the last quarter.
In line with past trends, Delhi NCR, Chennai and Mumbai collectively accounted for over 60 per cent of the total space take-up during the nine-month period. Chennai and Delhi NCR particularly saw over 5 million sq ft of leasing activity each, followed by Mumbai at 4.2 million sq ft, says the report.
Among occupier segments, Third-Party Logistics (3PL) players continued to dominate, accounting for nearly one-third of total leasing during the first nine months of 2025. Engineering and e-commerce followed, contributing 20 per cent and 15 per cent, respectively, to the overall Grade A space uptake. Notably, the e-commerce segment witnessed a 2.5x rise in space take-up in 2025, compared to the corresponding period last year, led by select large-sized transactions in key micro markets.
“The average quarterly leasing of Grade-A facilities across the top eight cities in 2025 has remained strong at around 9 million sq ft, underscoring the sector’s continued resilience,” says Vijay Ganesh, MD, Industrial & Logistics Services, Colliers India. “Large deals continue to play a pivotal role in driving the industrial & warehousing demand, driving nearly half of the leasing volumes during 2025. Notably, 3PL and e-commerce segments witnessed notable large-sized transactions, supported by sustained consumption and easing of supply-side constraints. Looking ahead, we expect warehousing requirements to pick up pace in the final quarter of 2025, building on the high transaction volumes seen in the first half of the year”.
The first nine months of 2025 witnessed a new supply of 28.8 million sq ft, marking a 6 per cent year-on-year increase. Mirroring the robust demand trajectory, Delhi-NCR, Chennai and Mumbai together accounted for nearly two-thirds of the total new supply during the year as well as in Q3 2025, reflecting heightened developer confidence in the primary markets.
NCR leads
“Delhi-NCR continues to lead the industrial & warehousing market, driving close to one-third of the overall demand and supply, followed by Chennai and Mumbai,” affirms Vimal Nadar, national director & head, research, Colliers India. “At a micro market level, Bhiwandi in Mumbai, Oragadam in Chennai and Hoskote in Bengaluru remained the most active areas in 2025 so far, together accounting for around 30 per cent of the demand. Within Delhi-NCR, Luhari and Farukh Nagar witnessed strong traction, particularly from 3PL and e-commerce occupiers. Demand in Chennai continues to be led by the engineering sector, while Mumbai remains dominated by 3PL players. Looking ahead, despite ongoing trade volatilities, we expect occupier demand to remain firm, supported by sustained domestic consumption, a strong pipeline of under-construction projects, and continued focus on quality assets”.
During Q3 2025, new completions reached 9.4 million sq ft, significantly outpacing demand and resulting in a 160-basis-point rise in vacancy levels on a sequential basis. However, rentals in key micro-markets continue to firm up, reflecting occupiers’ flight to quality and preference for sustainable and best-in-class warehousing facilities.
Meanwhile, the commercial office real estate sector has kept steady progress across the top seven cities. The latest Anarock Research data reveals a 6 per cent yearly rise in monthly office rentals – to about Rs90 per sq ft in the nine months of 2025 from about Rs85 per sq ft during the corresponding period of 2024.
Interestingly, despite increased new office completions in the top seven cities, average vacancy levels saw a marginal 3 per cent yearly decline – to 16.20 per cent in the nine months of 2025 from 16.70 per cent during the corresponding period of 2024. Chennai is the only city to record a single-digit office vacancy of 8.90 per cent – the least among all top cities.
Global headwinds, including tariffs, geopolitical tensions and layoffs in IT/ITeS sectors, seem to have had no negative impact on office space demand in the top cities. Office absorption continued to soar by 34 per cent – to about 42 million sq ft during the nine months of 2025, from about 31.31 million sq ft during the corresponding period of 2024. Back in the corresponding period in 2019, when office demand was high, the net absorption stood at about 32.26 million sq ft in the top seven cities – indicating a 30 per cent growth in 2025, says the Anarock report.