Manufacturing Sector Drives Record-Breaking 38% Surge in India's Industrial Real Estate Leasing

India's industrial and logistics real estate sector has reported experiencing unprecedented expansion, according to latest market data. Industry sources disclosed that manufacturing space leasing activity reached a remarkable 9.0 million square feet during the first half of 2025, representing a significant 38% year-on-year increase from the 6.5 million square feet recorded in H1 2024.

Pre-Pandemic Comparison Shows Dramatic Growth

Market experts noted that current leasing volumes demonstrated exceptional recovery momentum when compared to pre-COVID-19 levels. The H1 2025 figures were reported to be approximately six times higher than the 1.6 million square feet witnessed during the corresponding period in 2019, highlighting the sector's robust transformation over the past few years.

Asset-Light Strategies Reshape Market Dynamics

Industry analysts attributed the growth surge to companies increasingly adopting asset-light operational strategies. Manufacturing firms were said to be favoring leasing arrangements for Grade A and build-to-suit facilities, with government incentives supporting industrial development enabling faster deployment capabilities and flexible scaling options.

Grade A Facilities Dominate Market Landscape

Market data revealed that Grade A facilities constituted 55% of India's total industrial and logistics stock of 463.2 million square feet across eight major cities. The premium segment was reported to account for 81% of net absorption figures during H1 2025, which reached 24.6 million square feet overall.

Strong Full-Year Projections

Industry forecasters projected that full-year absorption would reach between 55-57 million square feet, representing a growth of 12-15% compared to the 50 million square feet achieved in 2024. These projections were said to be supported by broader consumption trends and expanding e-commerce activities.

Third-Party Logistics Players Drive Demand

Market observers noted that third-party logistics companies and manufacturing firms remained the primary occupiers of industrial spaces. These sectors were reported to be reshaping demand dynamics and highlighting the market's shift toward high-quality, flexible infrastructure solutions.

The transformation was said to reflect India's evolving manufacturing landscape, where companies prioritized operational efficiency and scalability through strategic leasing arrangements rather than capital-intensive ownership models.

Key Market Statistics - India's Industrial & Logistics Real Estate H1 2025

Disclaimer: This news article is based on publicly available market data and industry reports. The information presented reflects market conditions and statistics as reported by various industry sources. Readers are advised to conduct their own research and consult with qualified professionals before making any investment or business decisions related to industrial real estate. Market conditions and figures may vary and are subject to change.