India’s Industrial & Logistics Sector Reaches Record Leasing High in H1 2025; E-commerce Leads Growth

New Delhi — India’s industrial and logistics (I&L) sector has achieved a new leasing milestone in the first half of 2025 (January–June), with total leasing activity rising 63% year-on-year to 27.1 million square feet across the top eight cities, according to a new report released Tuesday by real estate consultancy CBRE.

The third-party logistics (3PL) segment maintained its leadership in I&L leasing, contributing 32% of total demand in H1 2025. However, the standout performer was the e-commerce sector, which saw its market share jump from 9% in H1 2024 to 25% this year—more than doubling its footprint and emerging as the key growth driver.

Leasing activity from the engineering and manufacturing (E&M) sector also saw a modest rise, increasing from 18% in H1 2024 to 19% in H1 2025.

CBRE attributed the surge in E&M leasing to government-led infrastructure projects and supportive policies such as the Production Linked Incentive (PLI) scheme and ‘Make in India 2.0’, which have bolstered the manufacturing sector and, in turn, increased warehousing demand.

Regionally, Asia Pacific-based companies led space take-up in Q2 2025, leasing 2.7 million square feet, a sharp rise from 0.6 million square feet in Q2 2024. American and EMEA-based firms followed with 1.9 million and 1.7 million square feet, respectively.

“The combined dominance of 3PL and e-commerce—together accounting for over half the demand in H1—reflects the shifting landscape driven by changing consumer preferences and the push for supply chain efficiency,” said Anshuman Magazine, Chairman and CEO, India, Southeast Asia, Middle East, and Africa at CBRE.

He added, “The next phase of growth will be shaped by premium, sustainable, and tech-enabled facilities, along with rapid expansion into tier-II cities to meet demand in underserved markets.”

In terms of supply, the report noted that 16.7 million square feet of new I&L space was added in H1 2025. Bengaluru, Chennai, and Mumbai were the primary contributors, accounting for 57% of the new supply.

On the demand side, Delhi-NCR led the leasing activity with 7.3 million square feet absorbed, followed by Bengaluru (4.0 million sq. ft.) and Hyderabad (3.6 million sq. ft.). Together, these three cities accounted for nearly 55% of the total leasing volume during the period.

With inputs from IANS