Driven by big-ticket deals, industrial and warehousing demand is on an upswing, with Delhi-NCR and Chennai carving a dominant share.

 According to Colliers report, with 36.9 million sq ft of leasing in 2025, industrial & warehousing demand across the top eight cities remained strong, witnessing a 16% YoY growth. During the year, Delhi-NCR led the demand with 24% share, closely followed by Chennai at 22% share. On a quarterly basis, after a relatively modest third quarter, Q4 2025 saw about 10.4 million sq ft of industrial & warehousing demand. Chennai, closely followed by Pune, cumulatively accounted for 56% of the quarterly demand.

While Third Party Logistics (3PL) players drove overall demand during the year, and accounted for 32% share in overall leasing, demand from Engineering and E-commerce segments too gained significant traction. At a micro market level, Bhiwandi in Mumbai led the leasing activity in 2025 with about 4.9 million sq ft of Grade A space uptake, followed by Chakan-Talegaon in Pune and Oragadam in Chennai. Both micro markets contributed to more than 2.5 million sq ft of demand each in their respective cities.

Trends in Grade A Gross Absorption (million sq ft)

Source: Colliers

Note: Data pertains to Grade A buildings. Absorption does not include lease renewals, pre-commitments and deals where only a Letter of Intent has been signed.

“A strong performance in the last quarter has propelled the demand for Grade A industrial & warehousing space to around 37 million sq ft in 2025, highest in recent years. Space uptake was driven by large deals, especially by 3PL firms which accounted for almost one-third of the leasing activity in the year. ” says Vijay Ganesh, Managing Director, Industrial & Logistics Services, Colliers India.

During the year 2025, large deals (≥ 200,000 sq ft) accounted for about 45% of the overall demand. Amongst these larger deals, 3PL companies continued to account for the bulk of share, followed by E-commerce and Engineering players.

Deal Size Trends in 2025 Grade A Demand (million sq ft)

Source: Colliers

Data pertains to Grade A buildings

Note:  Share here represents share of large, mid & small-sized deals in overall leasing for their respective cities 

Interestingly, on a quarterly basis, within the E-commerce segment, about 61% of the industrial & warehousing space uptake was through large deals, driven by large storage requirements of fulfillment centers and delivery hubs. On the contrary, more than two-thirds of deals in the FMCG and Retail segments were in the mid-sized category (100,000-200,000 sq ft), driven by the growing popularity of hyperlocal delivery firms.

“Delhi NCR and Chennai each recorded over 8 million sq ft of demand in 2025, collectively contributing over 45% of the leasing activity. Concurrently, markets like Pune and Mumbai saw space uptake of around 5 million sq ft each. The demand for Grade A warehouses across these four primary industrial hubs was predominantly driven by 3PL and engineering firms. With well-established manufacturing clusters and superior infrastructure connectivity, we expect these markets to cumulatively account for 70-80% of industrial & warehousing demand in 2026 as well.” says Vimal Nadar, National Director & Head, Research, Colliers India. 

The year 2025 saw 41.7 million sq ft of new supply, corresponding to a 15% YoY rise and indicates improved developer confidence and an optimistic outlook for the upcoming year. At the city level, Delhi NCR alone accounted for about 30% of the completions during the year. In terms of quarterly completions, Q4 2025 witnessed about 13 million sq ft of new supply across the top eight cities, reflecting an impressive YoY growth of 40%.

With demand outpacing supply in high activity micro markets, average rentals in prominent clusters rose by 5-10%. Overall vacancy levels, meanwhile, remained rangebound at around 16% at the end of 2025.

Trends in Grade A Supply (million sq ft)

Source: Colliers

Data pertains to Grade A buildings

With demand outpacing supply in high activity micro-markets, average rentals in prominent clusters rose by 5-10%. Overall vacancy levels, meanwhile remained rangebound at around 16% at the end of 2025.