India's Warehouse Demand Surges 29%
Demand for warehousing space in India jumped 29% year-over-year in 2025, reaching 72.5 million square feet. Manufacturing drove the boom, accounting for 47% of the demand, while e-commerce use also surged 56%, partly fueled by government production-linked incentive schemes.
The surge in demand was not uniform across the country; Pune emerged as the leading warehousing hub in 2025, recording an 86% year-on-year increase with 16 million square feet of transactions. Together, Pune and Chennai accounted for 51% of all manufacturing-related leasing activity. Alongside manufacturing and e-commerce, third-party logistics (3PL) providers were a significant driver of this growth. 3PL companies leased 19.6 million square feet of space, a 17% annual increase, signaling a continued trend of businesses outsourcing their supply chain operations. There is a distinct flight to quality, with modern, high-spec facilities being the most sought-after. Grade A warehouses, which offer better infrastructure and efficiency, accounted for 63% of the total space leased in 2025, up from 62% in the previous year. Despite the record leasing activity, the market appears balanced. Across the top eight cities, total warehousing stock reached 549 million square feet, while vacancy rates held steady at 11.6%, indicating that new supply is keeping pace with the robust demand. This boom is attracting significant capital from global investors. Private equity players like Blackstone, ESR, and Mapletree are investing heavily in developing state-of-the-art logistics parks across India. In January 2025, Blackstone committed USD 11 billion to the state of Maharashtra, with a substantial portion earmarked for logistics and data-center development. The trend is expected to continue, supported by national policies like the PM Gati Shakti plan, which focuses on infrastructure development. Projections indicate India's Grade A warehousing stock will exceed 500 million square feet by 2030, as the manufacturing sector's share of GDP is forecast to grow to 25% by 2035.
