India’s Industrial and Logistics Real Estate Sector Grows 28% in 2025

India’s industrial and logistics (I&L) real estate sector has recorded impressive growth in 2025, with leasing activity rising by 28% year-on-year in the first nine months, according to a CBRE report. The surge reflects India’s transformation into a global manufacturing and logistics hub supported by strong e-commerce activity, robust supply chain expansion, and growing institutional investment.

Record Leasing Across Top Indian Cities

Total I&L leasing across the top eight cities — Delhi-NCR, Bengaluru, Mumbai, Hyderabad, Chennai, Pune, Kolkata, and Ahmedabad — reached 37 million sq. ft. between January and September 2025, up from 28.8 million sq. ft. in the same period last year.

• Delhi-NCR led with 11.7 million sq. ft. of leasing activity, accounting for nearly one-third of total demand.

• Bengaluru followed with 5.7 million sq. ft., while Hyderabad contributed 4.6 million sq. ft.

• Mumbai and Kolkata recorded 4.2 and 3.8 million sq. ft., respectively.

Together, these five cities made up over 80% of total leasing, underscoring India’s urban concentration of logistics and manufacturing infrastructure.

3PL and E-Commerce Lead the Surge

The Third-Party Logistics (3PL) sector emerged as the biggest driver of growth, responsible for 40% of total leasing in Q3 2025. The rise in quick-commerce and last-mile delivery companies has accelerated the need for warehousing near consumption hubs.

E-commerce players accounted for 18% of leasing, while engineering and manufacturing firms contributed 15%, reflecting India’s industrial diversification.

According to Anshuman Magazine, Chairman and CEO (India, SE Asia, Middle East & Africa) at CBRE, companies are now focusing on supply chain resilience and automation. “There’s a clear shift towards high-specification Grade A warehouses designed for automation, sustainability, and operational efficiency,” he said.

Institutional Investors Expand Their Footprint

During the same period, new supply additions touched 23.8 million sq. ft., with Bengaluru, Chennai, and Mumbai contributing 62% of total development completions. Institutional investors such as Blackstone, ESR, Indospace, and CapitaLand continue to strengthen their presence through joint ventures and asset acquisitions.

These investors are betting on India’s long-term logistics potential, backed by rising consumption, infrastructure upgrades, and the “Make in India” initiative.

Sector-Wide Transformation: From Warehouses to Smart Hubs

The Indian warehousing industry has evolved from basic storage units to technology-enabled logistics parks integrating sustainability and automation.

Modern facilities now include:

• AI-driven inventory management and predictive maintenance systems.

• Green building certifications using solar energy and rainwater harvesting.

• Multimodal connectivity, linking warehouses to expressways, ports, and freight corridors.

• Cold chain storage, supporting the food, pharma, and agriculture sectors.

With these advancements, India’s I&L sector is transitioning into a critical enabler of supply chain resilience for both domestic and international trade.

Regional Market Analysis

Delhi-NCR

As the largest contributor, NCR remains the logistics capital of India. Its proximity to major consumption centers and access to expressways like the Delhi-Mumbai Industrial Corridor (DMIC) continues to attract 3PL and FMCG operators.

Bengaluru

Southern India’s logistics hub, Bengaluru, has seen rapid leasing growth due to robust e-commerce fulfillment activity. Developers are focusing on satellite zones like Hoskote and Nelamangala for new large-scale parks.

Hyderabad

Hyderabad’s warehousing market is expanding rapidly, with demand driven by pharma manufacturing, electronics, and packaging industries. The Outer Ring Road and logistics corridors near Shamshabad Airport are key growth nodes.

Chennai & Pune

These cities are benefiting from automotive and engineering manufacturing expansion. Strategic location near ports gives them a natural edge in export-driven logistics.

Mumbai & Kolkata

Mumbai’s port connectivity and financial ecosystem continue to attract institutional investments, while Kolkata is emerging as an eastern logistics hub servicing the northeast and neighboring countries.

Domestic and Global Occupier Trends

Domestic corporates accounted for 68% of leasing activity, demonstrating the strength of India’s homegrown industrial ecosystem.

European, Middle Eastern, and African (EMEA) corporates made up 14% of leasing, underscoring India’s growing global integration.

International players are increasingly viewing India as a regional warehousing hub, leveraging the country’s expanding road and freight network to serve South Asian markets.

Key Structural Drivers Behind the 2025 Growth

1. Government Policy Support – Initiatives like PM Gati Shakti, National Logistics Policy, and PLI schemes have enhanced ease of doing business.

2. E-Commerce Expansion – Rising digital retail penetration continues to boost demand for urban logistics and last-mile facilities.

3. Infrastructure Boom – Expressways, industrial corridors, and dedicated freight corridors are transforming logistics efficiency.

4. Manufacturing Shift – Global firms diversifying away from China are setting up production bases in India, creating new warehousing needs.

5. Technology Adoption – Automation, robotics, and IoT-driven inventory systems are improving warehouse productivity.

Investment and Outlook

CBRE forecasts India’s I&L leasing to surpass 50 million sq. ft. in 2026, supported by long-term economic resilience and investor optimism. Rental values in major hubs are expected to rise 6–9% annually, while land prices near Tier-1 logistics corridors may see double-digit growth.

Institutional capital inflows are likely to continue, with REIT structures and logistics-focused funds gaining popularity. Developers are also focusing on built-to-suit and multi-client facilities that cater to dynamic supply chain needs.

Conclusion

India’s industrial and logistics real estate sector has entered a new phase of maturity — marked by technology integration, capital inflow, and global relevance. As companies prioritize efficiency and resilience, the country’s warehousing and industrial infrastructure is rapidly aligning with international standards.

With demand outpacing supply for the foreseeable future, India’s logistics real estate story in 2025 is one of sustained expansion, strategic evolution, and global competitiveness.

Disclaimer:
This article is based on the CBRE report and publicly available data as of October 17, 2025. It is intended for informational purposes only and does not constitute financial or investment advice.