Warehousing Demand Propels India's Industrial Real Estate Growth by 22% in Q3 2025

A recent analysis by global real estate consultancy Savills India has revealed that the country's industrial real estate sector witnessed significant momentum during the third quarter of 2025, with warehousing leasing volumes registering a 22 percent year-on-year increase. The report indicated that demand patterns remained consistently strong across the nation's primary logistics and distribution centers.

Robust Growth Driven by Multiple Factors

According to the Savills India report, industrial and warehousing leasing activity jumped 22 percent when compared to the corresponding period in the previous year. The substantial growth underscored the expanding appetite for modern logistics infrastructure in India's evolving supply chain landscape.

The study highlighted that major logistics corridors including commercial hubs in Delhi-NCR, Mumbai's expanding industrial zones such as Navi Mumbai, Panvel and Ambernath, as well as growing markets in Hyderabad, Bengaluru's thriving real estate sector, Pune's investment destinations, and Chennai accounted for the bulk of leasing transactions during this period.

E-commerce and 3PL Continue Market Domination

The consultancy's findings revealed that e-commerce companies, third-party logistics providers, and last-mile distribution operators continued to drive demand in the warehousing segment. These sectors have consistently shown preference for strategically located facilities that can support their distribution networks efficiently.

Occupier preferences showed a marked inclination toward modern, Grade-A warehouse facilities equipped with superior accessibility features, adequate clear height specifications, comprehensive loading dock infrastructure, and proximity to major transport nodes. This shift reflected the increasing sophistication of supply chain requirements in the Indian market.

Long-term Commitments Signal Market Confidence

The report noted that numerous corporate entities and logistics firms were securing extended lease agreements spanning five years or more, demonstrating their commitment to ensuring supply chain stability and operational continuity. Such long-term commitments indicated strong confidence in India's industrial real estate prospects.

In high-demand micro-markets, particularly in core logistics zones situated near port facilities and transit hubs, rental rates experienced upward pressure. The limited availability of premium warehouse spaces in these strategic locations contributed to the rental appreciation.

Supply Side Response Gains Momentum

The analysis indicated that developers were responding to the sustained demand by accelerating construction activities for new logistics parks and expansion phases within existing industrial clusters across the country. This development pipeline was expected to bring additional Grade-A inventory to the market in the coming quarters.

Future Outlook and Market Implications

The sustained leasing momentum reaffirmed industrial real estate's position as a crucial growth vertical, particularly given the rising prominence of e-commerce and ongoing supply chain reshoring initiatives. Industry observers suggested that this trend aligned with India's broader economic transformation and infrastructure development goals.

Market analysts anticipated that developers and investors might redirect greater capital allocation toward warehousing projects, especially in under-supplied logistics nodes. Secondary and emerging corridors could attract increased developer attention as occupiers explored lower-rental alternatives near established hubs.

Infrastructure improvements, including enhanced road connectivity through expressways and metro-based logistics linkages, were expected to increasingly influence micro-market attractiveness. The report suggested that stakeholders should monitor rental normalization trends in stabilized zones as new supply entered the market, potentially creating balanced investment opportunities across various locations.

The findings underscored the dynamic nature of India's warehousing and logistics sector, which continued to evolve in response to changing consumption patterns, technological advancements, and shifting global supply chain strategies.

Disclaimer: This news article is based on information from a Savills India report regarding industrial real estate trends in Q3 2025. While efforts have been made to ensure accuracy, readers are advised to verify specific details and conduct independent research before making any investment or business decisions. Market conditions, rental rates, and occupancy levels may vary by location and change over time. The views expressed in this article are for informational purposes only and should not be construed as investment advice.