Industrial and warehousing leasing across India’s top eight cities remained robust in 2025, recording 36.9 million sq ft of absorption—a 16% year-on-year increase. Delhi NCR emerged as the largest market during the year with a 24% share of total demand, followed closely by Chennai, which accounted for 22%, according to Colliers India.

On a quarterly basis, leasing activity picked up momentum in the final quarter after a relatively subdued Q3. Q4 2025 witnessed approximately 10.4 million sq ft of industrial and warehousing demand, with Chennai and Pune together contributing 56% of the quarterly absorption.

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.

“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. Moreover, developers remained upbeat about long-term prospects, and this is reflected by over 40 million sq ft of completions during 2025 – highest in recent years. With the government’s continued focus on ramping up manufacturing and logistics infrastructure, industrial & warehousing requirements are likely to scale up over the course of next few years” says Vijay Ganesh, Managing Director, Industrial & Logistics Services, Colliers India.

Third-Party Logistics (3PL) players continued to dominate leasing activity during 2025 with about 12 million sq ft of Grade A space uptake, accounting for almost one-third of the annual demand. Demand from Engineering and E-commerce players also remained firm and cumulatively accounted for about 35% of the leasing activity during the year.

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.

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.