9 month industrial & warehousing demand at all-time high of 26.5 million square feet in 2025, up 11% YoY: Colliers India

• Delhi NCR, Chennai, and Mumbai drive over 60% of the demand as well as supply during January-September 2025
• 3PL firms drive almost one-third of 2025 demand, followed by engineering and e-commerce segments
• Q3 2025 demand, however, moderates at 7.0 msf, down 23% YoY
• Vacancy levels rise by 160 basis points on a QoQ basis, as supply outpaces demand

Bangalore, 15 October 2025: India’s industrial and warehousing sector continued to display resilience in 2025, with cumulative demand across the top 8 markets reaching 26.5 million sq ft in the first nine months, marking an 11% year-on-year growth. In fact, Grade A space uptake was at an all-time high in the 9-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.

However, following one of the best-performing quarters on record in Q2 2025, demand moderated in the third quarter to 7.0 million sq ft, reflecting a 23% YoY decline. Nevertheless, the ongoing festive season and spur 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% 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.

Trends in Grade A Gross absorption (mn sq ft)

Source: Colliers

Note: Data pertains to Grade A buildings. Absorption does not include lease renewals, pre-commitments and deals where only a Letter of Intent has been signed.

3PL continues to dominate demand in 2025, followed by Engineering & E-commerce

Among occupier segments, Third-Party Logistics (3PL) players continued to dominate, accounting for nearly one-third of total leasing during the first 9 months of 2025. Engineering and E-commerce followed, contributing 20% and 15%, 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. Large deals continue to play 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,” says Vijay Ganesh, Managing Director, Industrial & Logistics Services, Colliers India.

New supply exceeds demand; Delhi-NCR, Chennai and Mumbai witness majority of completions

The first nine months of 2025 witnessed new supply of 28.8 million sq ft, marking a 6% 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. The majority of the new completions were concentrated in NH 16 – Chennai, Bhiwandi – Mumbai and Luhari & Farukh Nagar micro markets of Delhi NCR, indicating  the continued preference for well-connected localities with strong infrastructure linkages.

 “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. At a micro market level, Bhiwandi (Mumbai), Oragadam (Chennai), and Hoskote (Bengaluru) remained the most active areas 2025 so far, together accounting for ~30% 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,” says Vimal Nadar, National Director & Head of Research, Colliers India.

Trends in Grade A Supply (mn sq ft)

Source: Colliers

Note: Data pertains to Grade A buildings

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.

Key deals Q3 2025 Pan India

Source: Colliers

Key deals Jan-Sep 2025 Pan India