India’s industrial and warehousing sector maintained its upward momentum in Q1 2025, recording a strong 9 million sq ft of gross leasing activity across the top eight cities—a solid 15% year-on-year (YoY) growth, as per data from Colliers India. Delhi NCR emerged as the frontrunner, accounting for over 3 million sq ft or 35% of the total space leased, with Chennai following at 22%.
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India’s industrial and warehousing sector continued its growth streak in Q1 2025, clocking an impressive 9 million sq ft of gross leasing activity across the top eight cities. This marks a robust 15% year-on-year (YoY) increase, according to Colliers India. Leading the charge was Delhi NCR, which contributed over 3 million sq ft—an impressive 35% share—followed by Chennai with 22%.
A notable shift in demand dynamics was seen this quarter, with the engineering and e-commerce sectors emerging as the primary drivers of space uptake. Together, they accounted for 46% of the total leasing activity. Engineering alone witnessed a significant surge, contributing 2.2 million sq ft—more than double the YoY volume—fueled by heightened activity in Chennai and Bengaluru. Meanwhile, e-commerce players leased close to 2 million sq ft, with Delhi NCR and Mumbai remaining key markets.
“The strong industrial & warehousing space uptake in the first quarter of 2025 was marked by robust demand across diverse occupier sectors,” said Vijay Ganesh, Managing Director, Industrial & Logistics Services, Colliers India. “Engineering and e-commerce sectors emerged as key demand drivers, followed by 3PL, each recording close to 2 million sq ft or more.”
Large-format deals remained a key feature of the quarter, with transactions exceeding 200,000 sq ft contributing to 48% of the total demand—amounting to 4.3 million sq ft. Delhi NCR dominated this segment with 1.9 million sq ft, followed by Chennai with 1 million sq ft. These deals were predominantly driven by e-commerce and engineering occupiers, along with the automobile sector.
“With about 3.1 million sq ft of demand, Delhi NCR witnessed the highest quarterly leasing in the last 2–3 years,” noted Vimal Nadar, Senior Director & Head of Research, Colliers India. “Grade A space uptake in micro-markets like Luhari and Tauru Road led this surge, with e-commerce accounting for nearly one-third of the leasing in the region.”
On the supply side, the sector matched demand with 9.4 million sq ft of new additions, marking a 16% YoY rise. Delhi NCR and Chennai again led the way, contributing nearly half of the new supply. Despite this, vacancy levels inched up by 250 basis points to 13%—largely due to tenant churn. Nonetheless, strong demand helped keep rentals buoyant in most industrial hubs.
Among micro-markets, Bhiwandi in Mumbai saw the highest leasing at 1 million sq ft, followed by Luhari (0.9 million sq ft) and NH-16 in Chennai (0.7 million sq ft). City-level performance revealed Delhi NCR leading with a staggering 121% YoY growth, followed by Chennai (2.0 million sq ft, up 5%) and Bengaluru (0.8 million sq ft, up 60%). Ahmedabad doubled its activity, while Mumbai and Pune reported declines.
Looking ahead, the sector is poised for sustained momentum, driven by institutional investment, e-commerce expansion, and a modernising logistics ecosystem. With a strong start in key cities, 2025 is shaping up to be another record-setting year for India’s industrial and warehousing sector.
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