India's warehousing segment reports 16.7 million sq ft leasing in Q1 of 2025, Mumbai reports the highest leasing
Manufacturing companies accounted for 48% of total warehousing demand, underscoring the sector’s continued momentum, Knight Frank India said in the report
India's warehousing leasing stood at 16.7 million sq ft across the top eight cities in Q1 of 2025. The leasing volume grew by 50% year over year, according to a report released by Knight Frank India, a real estate consultancy.
This growth was primarily driven by the manufacturing sector, which recorded a remarkable 94% YoY surge in leasing volumes, reaching 8 million sq ft in the first quarter of the calendar year, the report said.
According to the report, manufacturing companies accounted for 48% of total warehousing demand, underscoring the sector’s continued momentum and long-term investment outlook.
Mumbai reported the highest warehousing leasing
Mumbai led with 27% of total transacted volumes at 4.4 million sq ft, followed by Pune at 2.9 million sq ft, Chennai at 2.9 million sq ft, and Delhi NCR at 2.7 million sq ft.
Further, Bengaluru reported leasing of 1.4 million sq ft, Hyderabad 1.2 million sq ft, Ahmedabad 1 million sq ft, and Kolkata 0.7 million sq ft.
E-commerce players registered a 151% YoY spike in leasing
According to the report, E-commerce players also registered a surge in leasing, with a 151% YoY increase. While Third-Party
Logistics (3pl) players saw a 12% YoY increase in leasing volumes, but their overall share declined to 23%, reflecting a shift in sectoral dynamics.
The warehousing market now reflects a broad-based recovery, with improving sentiment and growing confidence across diverse industry segments, the report said.
The manufacturing sector was the primary driver in Pune and Chennai, while 3pl companies spurred market volumes in the Delhi NCR. The Chennai and Hyderabad markets saw the most volume growth, at 154% and 137% Yoy, respectively.
“The Indian warehousing market has demonstrated sustained momentum in Q1 2025, despite global supply chains being impacted by the new tariff environment. The China+1 strategy increasingly adopted by global businesses along with the government’s focus on ‘Make in India’ continues to propel the country’s manufacturing sector," said Shishir Baijal, Chairman and Managing Director, Knight Frank India.
"The e-commerce sector is also showing promising signs of recovery, and its trajectory in 2025 will be a key trend to watch. As infrastructure and policy support continue to grow, India is poised to strengthen its position as a logistics and industrial powerhouse," Baijal said.
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Grade A assets remain preferred
According to the report, demand for Grade A warehousing facilities remained firm in Q1 2025, accounting for 59% of all transactions. This preference underscores occupiers’ growing emphasis on higher efficiency, ESG compliance, and automation readiness.
Pune and Chennai have the highest concentration of Grade A stock, at 69% and 78%, respectively, due to their primary demand base of auto and auto ancillary occupiers. The report said tenants are clearly prioritising modern facilities that align with global logistics standards and offer scalability, safety, and technological integration.
Vacancy and supply trends
According to the report, the top eight warehousing markets in India have a warehousing stock of 495 million sq ft. Mumbai, the largest market, constituted 31% of the total stock, with the NCR being a distant second at 22%.
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The report said the vacancy level for Grade A properties was a healthy 11.5%, slightly higher than the 11.1% for Grade B properties due to the greater development interest.
