Strong demand from manufacturing, e-commerce lifts logistics leasing to record 60 msf in 2025

Strong demand from manufacturing, e-commerce lifts logistics leasing to record 60 msf in 2025

India’s logistics and industrial (L&I) real estate market is heading for a record year, with leasing volumes expected to touch nearly 60 million square feet in 2025, according to data from Cushman and Wakefield.

Market observers said that it would be the fourth consecutive year when the absorption would cross above 50 million square feet in logistics and industrial segment.

Strong manufacturing activity, rapid expansion of 3PL (Third Party Logistics) and e-commerce players, and policy-led efficiency gains have pushed the sector into a structurally higher growth orbit, with industry experts saying 2025 levels are likely to become the new baseline for leasing activity in 2026.

Data showed that Engineering and Manufacturing segment captured the lion’s share of 32 percent of the total leasing followed by 3PL (24 percent), E-commerce (15 percent), Automobile (8 percent), FMCG (7 percent) and Retail (5 percent).

This broad-based momentum supports strong visibility for L&I space take-up, reinforcing confidence that leasing volumes in 2026 can sustain the current elevated trajectory.​

By H1-2025, volumes had crossed 30.7 msf across the top 8 markets, which include Delhi-NCR, Mumbai, Bengaluru, Chennai, Hyderabad, Kolkata, Pune and Ahmedabad, the data showed.

Rental growth outlook for 2026​

Cushman and Wakefield research showed that the projected 2026 rentals across all markets fall within the 3–7 percent Pan-India rental growth corridor.

Pune is likely to post a strong year‑on‑year growth at about 7 percent, reflecting tight vacancy in key micro‑markets and sustained demand from manufacturing occupiers and 3PL players.​

Mumbai, Hyderabad, Chennai, Kolkata, Bengaluru and Delhi NCR are likely to see 4–5 percent rental growth, signalling property owners’ ability to push modest increases while staying competitive for large‑ticket mandates. Ahmedabad is projected to record relatively softer rent growth of 3 percent, data showed.

Abhishek Bhutani, Managing Director, Logistics & Industrial, Cushman & Wakefield said that the logistics and industrial sector has delivered a landmark year, with pan-India leasing activity poised to reach nearly 60 million square feet—the highest level recorded to date.

“This unprecedented demand has translated into broad-based rental growth across key markets, underscoring the structural strength of the sector. Manufacturing-led occupier momentum remains robust, supported by policy impetus, supply-chain diversification, and sustained expansion by both domestic and global players. At the same time, institutional investors continue to demonstrate strong conviction, with Mumbai, Pune, Bengaluru, and Chennai attracting a significant share of capital flows,” he said.

Supply pipeline in 2026

Looking ahead, a healthy development pipeline is expected in 2026, which should further support occupier requirements and reinforce the sector’s long-term growth trajectory, Bhutani said.

Pune, Bengaluru and Chennai remain the most expansionary markets, with 2026 supply additions of 7.5–13.75 msf- largely led by institutional developers - reinforcing their role as key distribution and manufacturing hubs, the data showed.

Mumbai and Delhi-NCR could also witness new stock addition of 20 msf and 5 msf, respectively, supported by large L&I parks along major transit corridors, while Kolkata and Hyderabad have more measured pipelines of 4 msf and 3 msf respectively. Ahmedabad could add 0.5 msf, the research showed.