Bangalore, India: India’s industrial and warehousing real estate market recorded a 29% year-on-year growth in 2025, reflecting strong demand from manufacturing, logistics, and e-commerce sectors, according to a recent report by global property consultancy Knight Frank India.
The report highlights that the sector witnessed total transaction volumes of approximately 72.5 million sq. ft. in 2025, marking one of the strongest annual performances in recent years. The growth reflects the increasing importance of logistics infrastructure and supply chain networks in India’s expanding economy.
Manufacturing Sector Leads Demand
The manufacturing sector emerged as the largest driver of industrial and warehousing demand, accounting for around 47% of total space absorption, with nearly 34 million sq. ft. of transactions recorded in 2025. This segment also registered an estimated 55% year-on-year increase in leasing activity, reflecting the expansion of manufacturing operations and industrial supply chains.
Experts attribute this momentum to policy initiatives such as the Production Linked Incentive (PLI) schemes, increasing domestic manufacturing capacity, and global supply chain diversification strategies.
Growth Driven by Logistics and E-commerce
In addition to manufacturing, third-party logistics (3PL) providers and e-commerce companies continued to drive significant leasing activity across major logistics hubs. E-commerce space absorption rose 56% year-on-year to approximately 7.8 million sq. ft. in 2025, indicating renewed expansion among online retail and quick-commerce companies.
The increasing adoption of modern logistics facilities has also strengthened demand for Grade-A warehousing assets, which accounted for around 63% of total leased space during the year.
Key Markets and Regional Activity
Among India’s major logistics markets, Pune emerged as the leading city, recording around 16 million sq. ft. of transactions and capturing nearly 22% of the national leasing volume.
Manufacturing-related transactions were largely concentrated in Pune and Chennai, which together accounted for over half of the manufacturing-led leasing activity recorded during the year.
Real Estate and Infrastructure Implications
The strong growth in industrial and warehousing demand reflects India’s evolving role as a manufacturing and distribution hub within global supply chains.
Industry analysts note that sustained demand for logistics infrastructure is encouraging the development of large-scale logistics parks, industrial corridors, and modern warehousing facilities across major cities and emerging industrial clusters.
With continued investments in infrastructure, logistics networks, and manufacturing capacity, India’s industrial real estate sector is expected to remain a key component of the country’s broader economic expansion.
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