India's Warehousing Boom: 16% Growth as Manufacturing Leads Demand

With sustained occupier appetite, year-to-date (YTD) leasing activity reached 49.2 million square feet, up 32 per cent YoY, placing the sector on track for another record year, according to Knight Frank India, a leading international property consultancy.

Manufacturing occupiers (excluding FMCG and FMCD) maintained their lead as the largest demand driver, contributing 44 per cent of total transactions in Q3 2025 and 45 per cent YTD. The sector clocked a 56 per cent YoY increase in volumes in the first nine months of 2025.

The report highlights continued momentum from manufacturing, third-party logistics (3PL), and e-commerce occupiers, supported by resilient domestic demand, supply chain diversification, and policy-led industrial expansion.

Grade A facilities remained the preferred choice among occupiers, accounting for 61 per cent of leased space so far in 2025, compared to 58 per cent in the same period last year, the report mentioned.

India's industrial and warehousing landscape continues to strengthen on the back of fundamental shifts, particularly manufacturing expansion, supply chain diversification, and improving logistics efficiency, said Shishir Baijal, Chairman and Managing Director, Knight Frank India.

Demand remains broad-based, with leasing activity sustaining growth momentum and Grade A facilities now accounting for 61 per cent in YTD terms of occupier take-up, reflecting a clear move toward global-standard infrastructure.

"With strong business sentiment and sustained policy support, the sector remains positioned for long-term, high-quality growth," said Baijal.

The e-commerce sector recorded a sharp revival, leasing 2.5 mn sq ft in Q3 2025, a 137 per cent YoY surge, marking its highest quarterly volume since early 2023.

Rent growth remained positive across markets, supported by strong occupier activity, particularly from the manufacturing sector.

The manufacturing outlook remains strong as firms continue diversifying supply chains and shifting production to India, supported by consistent government incentives, said the report.

- IANS