Leased space by industrial, warehousing sector up 15% in Q1 2025: Report

Engineering and ecommerce companies overtake third-party logistics companies in demand

The industrial and warehousing sector leased 9 million square feet of space in the first quarter of 2025 (Q1 2025) in the country’s eight largest cities, clocking a 15 per cent increase in demand compared to the same period last year, said a report by Colliers India on Wednesday.

 

Delhi and cities in the national capital region (Delhi NCR) led growth, leasing more than 3 million square feet and comprising around 35 per cent of the total share. Chennai was next, comprising around 22 per cent of overall leasing activity.

 

The engineering sector was the primary driver for demand, accounting for about 25 per cent of leased space in Q1 2025. Ecommerce played a significant role, securing 21 per cent of the demand. The two sectors collectively surpassed the leasing volume of third-party logistics companies, which are typically market leaders. The change marks a broadening base of demand within the industrial and warehousing segment.

   

As much as 9.4 million square feet of new industrial and warehousing space became available in Q1 2025, increasing 16 per cent from the year before. The “near equilibrium” between demand and supply indicates a healthy and active market, said the report.

 

Large-scale transactions, defined as deals exceeding 200,000 square feet, comprised nearly half of the total quarterly demand. It signifies significant expansion strategies by major occupiers, particularly in ecommerce, engineering, and automobile sectors. Delhi NCR and Chennai dominated in terms of these large-sized deals.

 

"The strong industrial and warehousing space uptake in the first quarter of 2025 was marked by robust demand across diverse occupier sectors...These are healthy signs of overall growth, reflecting broad-based demand which aligns with domestic macro-economic indicators," said Vijay Ganesh, managing director, industrial & logistics services, at Colliers India.