India's warehousing sector sees absorption rebound on demand resurgence

Key micro-markets saw an increase in leasing activity, with e-commerce and 3PL players gaining momentum

India’s warehousing and logistics sector saw a rebound in the July to September period (Q3) of 2025, led by a resurgence in occupier demand across key micro-markets and renewed momentum in the e-commerce and third-party logistics (3PL) segments, according to a report by workspace solutions firm Vestian.

 

The sector recorded a 64 per cent quarter-on-quarter (Q-o-Q) rise in national absorption at 9.2 million square feet (msf) in this quarter, up from the 5.57 msf reported for Q1 of 2025.

 

However, this was still 36 per cent lower on a year-on-year (Y-o-Y) basis, compared to a record high national absorption of 14.28 msf reported for Q3 of 2024.

 

The sequential recovery was led by markets such as Mumbai, Delhi NCR and Kolkata, which contributed heavily to the overall absorption figures.

 

The report states that Mumbai contributed 47 per cent of the pan-India absorption at 4.29 msf, a 377 per cent Q-o-Q rise from the 0.90 msf recorded in the last quarter.

 

“The increase in absorption can be attributed to renewed occupier demand in key micro-markets such as Bhiwandi and Panvel, which accounted for nearly 96 per cent of the total absorption in the city,” it added.

 

Delhi National Capital Region (NCR) emerged as the second-largest contributor with 1.28 msf of absorption in Q3 2025, registering an 83 per cent increase over the previous quarter from 0.70 msf in Q2 2025.

 

This, however, was a 40 per cent Y-o-Y drop from the 2.15 msf absorption recorded in Q3 of 2024.

 

Similarly, Chennai also witnessed sustained leasing activity with 1.13 msf of absorption in this quarter, its highest in the past seven quarters. On a sequential basis, absorption increased by 151 per cent from 0.45 msf recorded in Q2 2025.

 

Leasing activity in Kolkata swelled by 950 per cent sequentially, resulting in 1.26 msf of absorption in Q3 2025, the highest ever absorption recorded in the city.

 

On the other hand, some major markets recorded a drop in leasing activity due to trend corrections after several quarters of high absorption.

 

Bengaluru, for example, recorded the lowest absorption among major cities at 0.13 msf, falling sharply by 94 per cent Q-o-Q from 2.03 msf in the last quarter. Pune too continued to see a steady fall in absorption for the fourth straight quarter. It slipped to 0.64 msf in Q3 2025, down 31 per cent from 0.93 msf in Q2 2025.

 

Commenting on the trends, Srinivas Rao, chief executive officer (CEO) at Vestian, said that the resurgence in occupier demand across key micro-markets, coupled with renewed momentum in the e-commerce and 3PL segments, underscores the sector’s growing depth and diversification.

 

“As occupiers focus on network optimisation and grade-A assets, India’s warehousing and logistics landscape is reshaping for a stronger performance in the upcoming quarters,” he added.