Industrial and warehousing demand in India up 15 pc in Q1 2025

Bengaluru(The Uttam Hindu):  Industrial and warehousing demand across the top eight cities in India remained robust at 9 million square feet (sq ft) in Q1 2025 with 15 per cent annual growth, a report showed on Wednesday. Delhi-NCR and Chennai led the demand, cumulatively accounting for around 57 per cent of the overall leasing in Q1. The demand for Grade A industrial & warehousing space was particularly impressive in Delhi-NCR, according to a Colliers report.

Across the top eight cities, engineering sector drove demand this quarter, contributing to about 25 per cent of the overall industrial and warehousing space uptake, followed by e-commerce with 21 per cent share. Both these sectors have surpassed the demand from Third Party Logistics (3PL) players, the usual frontrunner. While Chennai and Bengaluru saw strong traction from occupiers in the engineering space, demand from e-commerce players remained significant in Delhi-NCR and Mumbai, the report mentioned.

“Automobile players also picked up significant Grade A industrial and warehousing space at 1.3 million sq ft. These are healthy signs of overall growth, reflecting broad-based demand which aligns with domestic macro-economic indicators,” said Vijay Ganesh, Managing Director, Industrial and Logistics Services, Colliers India. Engineering and e-commerce players drove the bulk of leasing during the quarter, together accounting for about 46 per cent of the demand.

With about 2.2 million sq ft of leasing, engineering firms alone accounted for about one-fourth of the Grade A industrial and warehousing demand in Q1 2025. The sector saw over 2 times times growth in leasing activity on an annual basis, led by robust demand in Chennai and Bengaluru. E-commerce also saw close to 2 million sq ft of leasing, led by Delhi-NCR and Mumbai, said the report.

During Q1 2025, large deals (above 200,000 sq ft) accounted for 48 per cent of the demand at 4.3 million sq ft. These larger deals were driven by e-commerce companies, followed by engineering and automobile firms. The first quarter of 2025 saw new supply to the tune of 9.4 million sq ft, a 16 per cent annual rise. New supply was almost in line with the strong leasing activity during the quarter, indicating improved developer confidence in the industrial and warehousing market, said the report.