Demand for industrial and logistics real estate reached an all-time high this year, with leasing volumes increasing nearly 19 per cent to 76.5 million square feet across 24 major cities in India, according to a Savills India report.
The report showed that the manufacturing sector leased 29 per cent of spaces, followed by third-party logistics firms at 28 per cent, and e-commerce companies at 12 per cent.
“India’s Industrial and Logistics sector continued its strong post-pandemic growth trajectory in 2025, recording its highest-ever annual absorption of 76.5 million sq ft,” Savills India said. In the 2024 calendar year, leasing of industrial and logistics real estate stood at 64.5 million square feet.
Highest demand cities
Out of the total leasing this year, eight tier-I cities —Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, Delhi-NCR, and Pune—saw a 20 per cent growth in leasing to 59.5 million square feet this year, up from 49.7 million square feet in 2024.
Delhi-NCR remained the best performer, leasing 13 million square feet this year, compared to 9.8 million square feet in 2024.
Demand in tier 2 and tier 3
Leasing activities in tier-II and tier-III cities grew 14.5 per cent in the 2025 calendar year to 17 million square feet from 14.8 million square feet in the preceding year.
These 16 Tier II and Tier III cities are Guwahati, Bhubaneshwar, Patna, Hosur, Coimbatore, Rajpura, Lucknow, Jaipur, Nagpur, Surat, Indore, Kochi, Hubli, Vizag, Belgaum and Anantapur.
Savills India expects both supply and absorption of industrial and logistics spaces to surpass 80 million sq ft next year.