India’s industrial and warehousing market experienced unprecedented growth in the first half of 2025, setting new benchmarks for leasing activity. According to the latest industry data, nearly 20 million sq. ft. of space was leased during this period, marking a 33% year-over-year increase. The momentum continued into the second quarter, which alone recorded 11 million sq. ft. of leasing, making it the most active quarter for warehousing absorption in recent memory.
Delhi NCR and Chennai stood out as the top-performing regions, jointly accounting for almost 50% of the total leasing activity in H1 2025. The surge in demand within Delhi NCR was largely fueled by significant transactions in key industrial zones like Farukh Nagar and Kulana.
Third-Party Logistics (3PL) providers emerged as the leading demand drivers, responsible for 32% of the total leased space. Close behind were the engineering, e-commerce, and automotive industries, each securing between two and four million sq. ft. of warehousing capacity. The trend also indicated a strong preference for Grade A infrastructure, with premium warehousing facilities dominating the leasing landscape due to their modern amenities and operational efficiency.
On the supply side, developers kept pace with the rising demand by introducing 19 million sq. ft. of new warehouse space in the first half of 2025, reflecting an 11% annual growth. Between April and June alone, 10 million sq. ft. of new supply was completed, the highest quarterly addition in several years. Again, Delhi NCR and Chennai led the way in terms of new developments, contributing half of the newly available space.
Large-scale leasing transactions continued to be a defining trend, with nearly 50% of the deals involving spaces exceeding 200,000 sq. ft. These large transactions were heavily concentrated in Delhi NCR and Mumbai, underscoring the growing appetite for expansive, high-tech storage solutions.
Despite the robust pipeline of new projects, vacancy rates remained stable at 13.5%. The sustained demand and increasing availability of high-end warehousing spaces led to a rise in rental rates across prime micro-markets.
Looking ahead, industry experts expect the sector to maintain its upward trajectory, driven by strong demand from diverse industries. Developers are projected to introduce between 35 and 40 million sq. ft. of additional Grade A warehouse capacity by the end of 2025, continuing to reshape India’s logistics and storage landscape.
