Large lease deals propel India’s industrial & warehousing growth amid global headwinds

Large-scale deals continue to be a significant catalyst for growth in India's industrial and warehousing real estate market despite global uncertainties, US tariff and geopolitical challenges.

Major transactions such as Amazon's lease of 500,000 sq ft at Welspun Logistics Park in Delhi NCR, Scootsy Logistics (Swiggy) securing 580,753 sq ft at Bhiwandi in Mumbai, and DB Schenker’s 384,809 sq ft lease at BGR Logistics Park, Mumbai, exemplify this trend. These deals highlight how market momentum is building on the growing need for efficient supply chains and last-mile delivery operations.

Nearly half of the leasing volumes this year stem from large transactions, largely driven by the robust demand from Third-Party Logistics (3PL) and E-commerce players.

The average quarterly leasing of Grade-A facilities across the top eight cities in 2025 has remained strong at around 9 million sq ft, underscoring the sector’s continued resilience. Sectors like 3PL and E-commerce witnessed notable large-sized transactions, supported by sustained consumption and easing of supply-side constraints. “

Looking ahead, we expect warehousing requirements to pick up pace in the final quarter of 2025, building on the high transaction volumes seen in the first half of the year,” said Vijay Ganesh, Managing Director, Industrial & Logistics Services, Colliers India.

The sector witnessed cumulative demand of 26.5 million sq ft across the top eight industrial markets during the first nine months of the year, reflecting an 11% year-on-year increase. Grade A space uptake was at an all-time high in this period, with key occupier segments dominated by 3PL players who accounted for nearly one-third of total leasing volumes. The Engineering sector contributed 20%, while E-commerce players, whose warehousing requirements surged 2.5 times compared to last year, made up 15%, mentioned Colliers.

“India is at the cusp of a logistics and infrastructure transformation driven by the Make in India initiative and the rapid rise of a tech-enabled economy.As supply chains evolve to serve both global manufacturing and last-mile delivery, the demand for larger, smarter, and more sustainable Grade A warehouses continues to accelerate,” said Anshuman Singh, MD&CEO, IndoSpace.

The supply side has also kept pace, with 28.8 million sq ft of warehouse space delivered in the first nine months of 2025, a 6% increase from the previous year. Delhi-NCR, Chennai, and Mumbai accounted for nearly two-thirds of this new supply, highlighting developers’ growing confidence in these markets. Micro markets like Bhiwandi in Mumbai, NH 16 in Chennai, and Luhari and Farukh Nagar in Delhi NCR have remained preferred hubs, owing to their connectivity and infrastructure.

“We have seen a resurgence in demand for big-box fulfillment centers across our pan-India portfolio. After a period of consolidation, the inventory accumulated by the e-commerce and 3PL sectors during the pandemic is largely exhausted.The ongoing festive demand for fulfillment centers is a welcome addition to the otherwise robust demand we have continued to see for our other two segments - industrial and in-city warehousing” said Urvish Rambhia, Principal at Blackstone.

Delhi-NCR continues to lead the industrial & warehousing market, driving close to one-third of the overall demand and supply, followed by Chennai and Mumbai. At a micro-market level, Bhiwandi, Mumbai, Oragadam Chennai, and Hoskote Bengaluru remained the most active areas by 2025 so far, together accounting for ~30% of the demand. Within Delhi-NCR, Luhari and Farukh Nagar witnessed strong traction, particularly from 3PL and E-commerce occupiers. Demand in Chennai continues to be led by the Engineering sector, while Mumbai remains dominated by 3PL players.

N Amrutesh Reddy, Managing Director, NDR Warehousing said, the firm is witnessing a sharp uptick in demand from e-commerce and third-party logistics (3PL) players, particularly in key strategic hubs such as Delhi-NCR, Mumbai, and Bengaluru. “The recent big-ticket deals underscore the sector’s strength and the structural nature of this demand. The sentiment in industrial real estate continues to be upbeat, with institutional investors and occupiers alike viewing it as a resilient, scalable asset class poised for sustained expansion over the coming years,” he said.

Additional key players contributing to large leasing transactions in 2025 include Zomato taking 280,000 sq ft at Durgapur Expressway in Kolkata, Yusen Logistics leasing 265,000 sq ft in Hyderabad, Avenue Supermarts securing 251,677 sq ft in Chennai, Mahindra Logistics leasing 150,000 sq ft in Delhi NCR and Honda's 500,000 sq ft lease in Bengaluru’s Hoskote cluster. VRL Logistics also took up 350,000 sq ft in Ahmedabad’s Temenos Logistics Park.

However, the Q3 2025 saw demand moderate to 7 million sq ft, a 23% decline year-on-year, following one of the best-performing quarters in Q2. However, festive season demand coupled with heightened requirements from the E-commerce and electronics sectors is expected to fuel a demand rebound in the final quarter. During Q3 alone, new warehouse completions reached 9.4 million sq ft, surpassing demand and leading to a 160-basis-point rise in vacancy. Yet, rentals in prime micro markets have firmed, reflecting a strong occupier preference for top-grade, sustainable warehousing facilities.

Industry Experts mentioned that the ongoing trends of ‘flight-to-quality’ and expansion into tier-II and tier-III cities to tap underserved regions, reinforced by technological integration and institutional capital inflows will further drive growth. Going ahead, India’s industrial and warehousing sector is positioned for sustained growth, powered by large leasing deals from logistics, e-commerce, and manufacturing players, increasing new supply, and improving market fundamentals.