India’s industrial and warehousing leasing hit a record 37 million sq ft from January to September 2025, a 28% jump driven by strong demand in Delhi-NCR. Bengaluru and Hyderabad also saw significant activity. This surge is fueled by logistics providers and quick commerce, with businesses prioritizing efficient, modern facilities for supply chain resilience and expansion.
India’s Industrial Real Estate is Booming: What’s Driving the Surge?
India’s industrial real estate sector is humming with activity. Forget whispers of slowdown; the nation’s top eight cities have witnessed a remarkable 28% surge in industrial leasing during the first half of this year. This isn’t just a blip – it’s a full-blown boom, reshaping the landscape of commerce and logistics. But what’s fueling this dramatic uptick, and what does it mean for the future of Indian business?
Delhi-NCR is leading the charge, gobbling up a staggering 11.7 million square feet of industrial space. This robust demand underscores the region’s strategic importance as a key distribution hub and manufacturing powerhouse. The region’s connectivity, infrastructure development, and access to a large consumer base are all contributing to its magnetic pull for businesses.
But Delhi-NCR isn’t alone in experiencing this industrial renaissance. Chennai, Mumbai, Pune, Bangalore, Kolkata, Hyderabad, and Ahmedabad are also seeing impressive growth, painting a picture of nationwide expansion. This widespread growth signifies something bigger than localized trends; it points to a systemic shift in how businesses operate and perceive India as a global manufacturing and logistics center.
So, what’s behind this surge in industrial leasing? Several factors are at play.
The E-commerce Effect and Warehousing Demand
E-commerce continues its relentless march across India, transforming consumer behavior and creating unprecedented demand for warehousing. To meet the ever-increasing demands of online shoppers, companies need strategically located warehouses to ensure swift delivery and efficient inventory management. This isn’t just about storing goods; it’s about optimizing the entire supply chain from manufacturer to consumer.
The “Amazon effect,” as it’s sometimes called, has forced traditional retailers to adapt and invest in their own e-commerce capabilities, further fueling the demand for warehouse space. This ripple effect is creating a virtuous cycle of growth within the industrial real estate sector.
Manufacturing Momentum and Government Initiatives
India’s manufacturing sector is experiencing a resurgence, driven by government initiatives like “Make in India” and production-linked incentive (PLI) schemes. These initiatives are designed to attract foreign investment, boost domestic production, and create jobs. As manufacturing activity expands, so does the need for industrial space, pushing demand for leasing even higher.
Moreover, global supply chain disruptions have prompted companies to diversify their manufacturing bases, with many looking to India as a viable alternative. This “China plus one” strategy is further bolstering the demand for industrial space, creating new opportunities for growth and investment.
Logistics Efficiency and Infrastructure Development
India’s logistics infrastructure is undergoing a dramatic transformation. The development of new highways, railways, and ports is improving connectivity and reducing transportation costs. This is making it easier and more efficient for businesses to move goods across the country, further incentivizing investment in industrial facilities.
Dedicated freight corridors, multi-modal logistics parks, and improved warehousing technologies are all contributing to a more efficient and streamlined supply chain. This improved efficiency is not only reducing costs but also enhancing India’s competitiveness as a global manufacturing and logistics hub.
The Future of Industrial Leasing in India
The current boom in industrial leasing is likely to continue for the foreseeable future. As e-commerce continues to grow, manufacturing activity expands, and logistics infrastructure improves, the demand for industrial space will only intensify. The key will be strategic planning, sustainable development, and embracing technological advancements to optimize space utilization and minimize environmental impact. Companies are increasingly focused on sustainability and require spaces that meet green building standards. Meeting these requirements will be crucial for continued success in this rapidly evolving market. This sustained growth presents significant opportunities for investors, developers, and businesses alike, solidifying India’s position as a key player in the global industrial landscape.
