India’s industrial and logistics real estate market posted a cumulative absorption of 55.3 million square feet in the first nine months of 2025, its best ever showing for the period, data from Savills India shows.
The demand has been primarily fuelled by a surge in manufacturing activity, alongside steady requirements from third-party logistics (3PL) and e-commerce occupiers.
In the third quarter alone, gross absorption hit 21.3 msf, up 21.7 percent from the year ago period. New Grade-A supply reached 21.6 msf.
Top six cities — Delhi-NCR, Mumbai, Bengaluru, Pune, Chennai, and Hyderabad — accounted for 84 percent of total absorption. Tier 2 and 3 markets such as Jaipur, Lucknow, Coimbatore and Indore contributed 16 percent.
Manufacturing-led absorption surged, with its share spiking from 16 percent to 27 percent YoY.
India’s industrial and warehousing sector is entering a defining phase, with 2025 and 2026 expected to set new benchmarks in both demand and supply, Savills India managing director (industrial & logistics) Srinivas N said.
“The sector is undergoing a significant transformation, driven by the expansion of manufacturing, rising demand for modern Grade-A distribution facilities, and the rapid development of Tier-II and Tier-III cities,” he said.
Government initiatives, coupled with inclusive policies focused on infrastructure and manufacturing, have attracted positive response globally, bringing in increased equity and investor confidence, he said.
On supply front, Tier 1 cities contributed the bulk of the supply with 17.5 msf (81 percent share) in Q3, while tier 2 and 3 markets added 4.0 msf (19 percent), a 37.9 percent YoY growth, the report said.
Grade-A facilities continued to dominate the market, accounting for 52 percent of the total absorption in the September quarter, indicating the growing demand for grade-A compliant space.
Delhi-NCR led with 21 percent of the total absorption, followed by Mumbai and Pune at 15 percent each, and Bengaluru at 11 percent.
Mumbai accounted for 18 percent of the overall supply, followed by Delhi-NCR and Pune at 15 percent each, and Bengaluru at 14 percent.
By the end of the year, industrial and logistics sector’s supply and absorption is expected to surpass 70 msf. The growth will be led by 3PL and manufacturing, alongside sustained demand from retail, fast moving consumer goods, and fast moving consumer durables, experts said.
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