India's warehousing sector clocks 50 pc leasing growth in Q1

Mumbai, May 9 (IANS) India’s warehousing sector recorded leasing of 16.7 million square feet in the January-March quarter, marking a significant 50 per cent year-on-year (YoY) increase, a report showed on Friday.

There was a strong performance in warehousing leasing across the top eight markets during Q1 2025, primarily driven by the manufacturing sector, which recorded a remarkable 94 per cent surge in leasing volumes, reaching 8 million sq ft in the first quarter, said the report by Knight Frank India.

Manufacturing companies accounted for 48 per cent of total warehousing demand, underscoring the sector’s continued momentum and long-term investment outlook.

E-commerce players also registered a notable resurgence, with a 151 per cent increase in space uptake — albeit from a lower base — indicating renewed expansion activity.

While third-party logistics (3PL) players saw a 12 per cent increase in leasing volumes, their overall share declined to 23 per cent, reflecting a shift in sectoral dynamics.

Mumbai led with 27 per cent of total transacted volumes at 4.4 mn sq ft, followed by Pune, Chennai, and NCR, each contributing approximately 16–17 per cent of the same.

The manufacturing sector was the primary driver in Pune and Chennai while 3PL companies spurred market volumes in the NCR. The Chennai and Hyderabad markets saw the most volume growth at 154 per cent and 137 per cent, respectively, the report mentioned.

“The Indian warehousing market has demonstrated sustained momentum in Q1 2025, despite global supply chains being impacted by the new tariff environment. The China+1 strategy increasingly adopted by global businesses along with the government’s focus on ‘Make in India’ continues to propel the country’s manufacturing sector,” said Shishir Baijal, Chairman and Managing Director, Knight Frank India.

The e-commerce sector is also showing promising signs of recovery, and its trajectory in 2025 will be a key trend to watch.

“As infrastructure and policy support continue to grow, India is poised to strengthen its position as a logistics and industrial powerhouse,” he added.

Demand for Grade A warehousing facilities remained firm in Q1 2025, accounting for 59 per cent of all transactions.

—IANS

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