Demand for industrial and logistics real estate in India touched a historic peak in 2025, with leasing activity rising nearly 19% year-on-year to 76.5 million square feet across 24 key cities, according to a report by Savills India.
The study highlighted strong participation from the manufacturing sector, which accounted for 29% of total leasing. Third-party logistics (3PL) players followed closely with a 28% share, while e-commerce companies contributed 12% of overall demand.
Savills India noted that the sector has continued its robust post-pandemic momentum, recording its highest-ever annual absorption this year. In comparison, industrial and logistics leasing stood at 64.5 million square feet in calendar year 2024.
Top Cities Driving Demand
Eight tier-I cities—Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, Delhi-NCR and Pune—collectively recorded leasing of 59.5 million square feet in 2025, marking a 20% increase from 49.7 million square feet last year.
Delhi-NCR emerged as the strongest market, with leasing volumes rising to 13 million square feet in 2025 from 9.8 million square feet in 2024.
Growth in Tier-II and Tier-III Cities
Leasing activity in tier-II and tier-III cities also gained momentum, expanding 14.5% year-on-year to 17 million square feet in 2025, compared to 14.8 million square feet in the previous year.
Key tier-II and tier-III markets included Guwahati, Bhubaneswar, Patna, Hosur, Coimbatore, Rajpura, Lucknow, Jaipur, Nagpur, Surat, Indore, Kochi, Hubli, Visakhapatnam, Belgaum and Anantapur.
Looking ahead, Savills India expects both supply and absorption of industrial and logistics real estate to cross the 80 million square feet mark in 2026, supported by strong manufacturing, logistics and e-commerce demand.
