Industrial Real Estate in India Witnesses Unprecedented Growth as Manufacturing Sector Expands Rapidly

Mumbai, December 7, 2025 — India's aspiration to emerge as a global manufacturing hub is reportedly driving a significant transformation in the nation's industrial and logistics real estate sector. Industry experts have indicated that leasing activities and developer investments have reached unprecedented levels, with manufacturers increasingly demanding compliant, automation-ready, and sustainable infrastructure.

Seven-Fold Surge in Manufacturing Leasing Activity

According to data released by JLL India, light manufacturing leasing across the country's top eight cities has witnessed a remarkable seven-fold increase between 2020 and 2024. The leasing volume reportedly jumped from 3.2 million square feet in 2020 to 22.1 million square feet in 2024. Industry analysts have projected that the current year would close at approximately 25.4 million square feet, representing a 15 per cent year-on-year growth.

The report further suggested that manufacturing-led leasing could reach 34 million square feet by 2027, potentially accounting for 46 per cent of total industrial and logistics absorption. This growth trajectory aligns with India's industrial smart cities initiative designed to revolutionise the manufacturing landscape.

Yogesh Shevade, Head of Industrial & Logistics at JLL India, reportedly stated that the exponential growth highlighted a strategic shift in how manufacturers approached real estate. He emphasised that companies were now prioritising leased, grade-A facilities to support automation, compliance, and sustainability requirements.

Rising Preference for Grade-A and Sustainable Infrastructure

Industry sources have indicated that developers are aligning their investments with evolving market expectations by focusing on high-specification, compliant infrastructure designed for next-generation manufacturing. The demand has been particularly strong for automation-compatible, hygienic, and ESG-compliant buildings, often certified as green or sustainable facilities.

The share of Grade-A spaces in manufacturing leasing has shown consistent growth:

This shift towards premium industrial spaces reflects the broader trend of Maharashtra leading India in green building certifications, setting benchmarks for sustainable development across the sector.

Mehul Shah, CEO of LO-GOI Group, reportedly observed that the market was witnessing a structural transformation rather than merely increased demand. He noted that manufacturers were now focusing on speed-to-market, operational efficiency, and sustainability, which explained the group's heavy investment in automation-ready infrastructure across India's key logistics corridors.

Lease-First Expansion Strategy Gains Momentum

Another significant trend emerging in the industrial real estate sector is the adoption of lease-first expansion strategies. This approach reportedly enables companies to remain capital-efficient while accessing ready-to-use facilities, particularly benefiting manufacturers seeking to scale operations without substantial upfront investments.

According to market data, approximately 76 per cent of ready-built leasing demand between 2019 and September 2025 has been concentrated in three major regions:

• Pune
• Chennai
• National Capital Region (NCR)

The preference for build-to-suit construction facilities and ready-built leased assets over outright ownership has been growing steadily. Industry analysts have attributed this trend to the flexibility, speed, and cost control these options offer, particularly for firms navigating global supply chain pressures and capital expenditure constraints.

Major Investments Strengthening the Sector

The industrial real estate boom has attracted significant investments from both domestic and international players. Recent developments include major companies such as Yusen Logistics expanding with strategic warehouse leases and HUL securing massive warehousing facilities near Mumbai.

Furthermore, Actis and Mahindra Lifespaces joint venture to develop 16-17 million square feet of industrial and logistics parks across India demonstrates the sector's robust growth potential.

Key Market Metrics at a Glance

Policy Support Driving Sectoral Growth

The government's focus on national industrial corridors development has played a crucial role in supporting the sector's expansion. Additionally, India's plan to develop 12 new industrial smart cities is expected to further accelerate manufacturing growth and job creation.

State governments have also been proactive in attracting manufacturing investments. Rajasthan's strategic land reforms to boost the manufacturing sector exemplify such initiatives aimed at creating a conducive environment for industrial development.

Warehousing and Logistics Sector Thrives

The warehousing and logistics absorption has grown significantly, boosted by substantial investment inflows. Reports indicate that Indian warehouse leasing rose by 8 per cent in 2024, reflecting strong demand from e-commerce, manufacturing, and third-party logistics companies.

The adoption of advanced technologies has been accelerating, with smart warehouses and automation driving growth in India's material handling equipment sector. This technological transformation is making Indian logistics facilities increasingly competitive on the global stage.

Outlook for India's Industrial Real Estate

Industry experts have suggested that India's evolving manufacturing landscape is no longer merely about production capabilities but increasingly about infrastructure readiness, speed, compliance, and sustainability. The industrial real estate sector has been adapting rapidly, driven by a confluence of policy support, global supply chain realignments, and rising domestic demand.

With grade-A, automation-ready facilities becoming the standard requirement and lease-first strategies reshaping expansion approaches, India's industrial and logistics real estate ecosystem is positioned to play a central role in the country's journey towards industrial self-reliance and global competitiveness.

Disclaimer: This news article is intended for informational purposes only. The information contained herein has been compiled from sources believed to be reliable. Readers are advised to conduct their own due diligence and seek professional advice before making any investment or business decisions. Ghar.tv does not assume any responsibility for actions taken based on the information provided in this article.