India's industrial and warehousing market has extended its strong run in 2025, with leasing in the top 24 cities climbing to a record 59.1 million sq ft in the January-September period, according to property consultant Savills. The latest figures point to a market that is not only absorbing new supply at scale but also benefiting from structural shifts in manufacturing, logistics and retail distribution.
The performance reflects a broad-based demand cycle rather than a narrow, one-off surge. Light manufacturing, e-commerce and third-party logistics firms remained the principal occupiers, continuing to expand footprints as they seek larger, better-located and more efficient facilities. The data also suggests that occupiers are increasingly prioritising modern warehousing assets that can support faster turnaround times, inventory optimisation and last-mile delivery requirements.
Demand Broadens Further
Savills said Tier-I cities accounted for 47.2 million sq ft of leasing during the period, underlining the continued dominance of major urban markets in India's industrial real estate landscape. These cities remain the preferred choice for occupiers that need proximity to consumption centres, transport corridors, ports and airports, even as some activity gradually spreads to peripheral and emerging logistics hubs.
The concentration of demand in Tier-I markets also reflects the changing nature of warehouse use in India. Facilities are no longer being built solely for storage; they are increasingly serving as integrated nodes in supply chains, handling sorting, packaging, light assembly and distribution. That shift has made location, connectivity and scalability more important than simple land availability.
For e-commerce operators, the need to maintain service levels across dense consumer markets continues to support leasing momentum. For third-party logistics providers, the expansion of client mandates across sectors has translated into larger and more diversified warehousing requirements. Light manufacturing, meanwhile, has benefited from companies seeking to shorten supply chains and improve resilience amid global trade uncertainty.
Supply Keeps Pace
Fresh supply across the top 24 cities rose to 68.9 million sq ft in the same nine-month period, indicating that developers remain confident about medium-term demand. The increase in supply is significant because it suggests the market is not merely being driven by speculative activity; rather, it is being supported by genuine occupier absorption and a visible pipeline of requirements.
A healthy balance between leasing and supply is generally viewed as a positive sign for the sector. When demand is strong enough to absorb a large volume of new completions, it tends to support rental stability and encourages further institutional investment. It also signals that developers are better aligned with occupier preferences, particularly for Grade A assets with modern specifications, efficient layouts and strong multimodal access.
The rise in supply also points to the maturing of India's warehousing ecosystem. Over the past several years, the sector has moved from fragmented, small-format storage toward more organised industrial parks and logistics clusters. This transition has been accelerated by the growth of organised retail, the expansion of digital commerce and the push by manufacturers to improve distribution efficiency.
Structural Shift Underway
The latest numbers from Savills fit into a broader macroeconomic story. India's consumption base continues to deepen, while companies are reworking supply chains to reduce dependence on long, complex logistics routes. That is creating sustained demand for warehousing space in and around major cities, as well as along key industrial corridors.
The record leasing figure is also a reminder that industrial real estate is increasingly tied to the country's wider growth cycle. As manufacturing activity expands and logistics networks become more sophisticated, warehousing has become a critical enabler of economic efficiency. The sector's resilience is especially notable at a time when global trade conditions remain uneven and firms are seeking greater operational flexibility.
For policymakers and investors, the data offers a useful signal. Strong leasing and rising supply suggest that industrial real estate remains one of the more durable segments of India's property market, supported by end-user demand rather than purely financial speculation. If current trends persist, the sector could continue to attract capital, spur infrastructure development and reinforce India's role as a regional manufacturing and distribution hub.
The challenge ahead will be to sustain this momentum while ensuring that new supply remains aligned with occupier needs. For now, however, the market's trajectory appears firmly upward, with record leasing and robust completions pointing to a sector that is expanding in both scale and sophistication.