India's Industrial and Logistics Real Estate Sector Booms in H1 2025

India's Industrial and Logistics real estate sector is witnessing unprecedented growth in H1 2025. Manufacturing space leasing has reached a record 9.0 million sq. ft, up 38% from 2024. Grade A facilities dominate, fueled by strategic asset-light models, with major demand in Bengaluru, Pune, NCR, Chennai, and Mumbai.

The Industrial and Logistics (I&L) real estate sector in India has experienced remarkable growth in the first half of 2025, with manufacturing space leasing achieving record levels, according to JLL, a global real estate services firm. The leasing of manufacturing space has soared to an unparalleled 9.0 million square feet in H1 2025.

This figure signifies a substantial 38% Year-on-Year increase compared to H1 2024, which registered 6.5 million square feet and is strikingly six times higher than the pre-pandemic levels recorded in H1 2019 with 1.6 million square feet. Infrastructure development maintains its upward trend, with Grade A warehousing facilities now comprising 55% of the total 463 million square feet stock across India's eight major cities.

The sector witnessed a net absorption of 25 million square feet in H1 2025, with projections for year-end expected to hit between 55 and 57 million square feet—a notable rise of 12 to 15% from the 50 million square feet absorbed in 2024. Occupiers increasingly prefer Grade A facilities, which account for 81% of total absorption, highlighting the market's shift toward higher-quality infrastructure.

Bengaluru, Pune, NCR Delhi, Chennai, and Mumbai accounted for a combined 90% of India's net demand in H1 2025. This six-fold increase in manufacturing leasing illustrates both market expansion and a strategic pivot towards asset-light models, as manufacturers opt for Grade A and build-to-suit spaces to overcome land acquisition challenges and expedite operations, explained Yogesh Shevade, Head of Industrial & Logistics, India, JLL.

The 3PL/Logistics sector leads in demand with 28%, followed closely by Manufacturing at 24%, spanning industries like Automotive, Engineering, Electronics, and White Goods. JLL notes that manufacturing companies are increasingly embracing asset-light strategies, optimizing capital while leveraging turnkey facilities with pre-secured regulatory approvals.

Manufacturing leasing is particularly concentrated in Pune and Chennai, cities that host a significant portion of India's Grade A industrial stock. (ANI)