New Delhi, Aug 14 (IANS) India’s warehousing market recorded a 42 per cent Year-on-Year (YoY) surge in leasing volumes to 32.1 million square feet (mn sq ft) across the top eight markets in the first half of 2025 (H1 2025), a report said on Thursday.

This sharp rise in demand was led by the manufacturing sector, which saw a 71 per cent YoY growth in space uptake, accounting for 45 per cent of the total transactions, Knight and Frank, a global property consultant, said in its latest report.

According to the report, the increasing focus on higher grade facilities is also apparent as transaction volumes reflect that 63 per cent of leased space was Grade A, up from 54 per cent a year ago.

Pan-India stock exceeded 500 mn sq ft in H1 2025, with Grade A assets constituting 75 per cent of new supply; vacancy dropped from 13.1 per cent to 12.1 per cent as supply lagged demand, the report stated.

The manufacturing sector emerged as the leading occupier during H1 2025, accounting for 45 per cent of all transactions, a significant leap from prior periods.

The sector’s leasing volume reached 14.6 mn sq ft, up 71 per cent YoY in H1 2025. Notably, Mumbai and Pune together absorbed 44 per cent of this space, led by prominent companies such as SKS Fasteners, RenewSys India, Godrej and Boyce, and Lupin, the report noted.

3PL firms absorbed 8.7 mn sq ft (27 per cent share), rising 30 per cent YoY, with Mumbai constituting 35 per cent of the sector’s transacted volumes, followed by NCR and Pune.

E-commerce, while no longer the dominant sector, made a strong comeback with 3.3 mn sq ft, a 61 per cent increase over the previous year, now accounting for 10 per cent of all activity, according to the report.

“The healthy surge in the volumes transacted in the industrial and warehousing market reflects the depth of India’s rapidly expanding manufacturing and consumption base. A 71 per cent YoY rise in manufacturing-led activity highlights the shift towards India as a preferred production hub amid global realignments,” said Shishir Baijal, Chairman and Managing Director, Knight Frank India.

The report stated that transaction volumes grew across all cities except Kolkata.

Mumbai led with 7.5 mn sq ft, up 63 per cent YoY. Pune and Chennai registered 76 per cent and 135 per cent growth respectively, while the Ahmedabad market reached a new half-yearly high of 3.6 mn sq ft.

Similarly, Bengaluru also saw a 72 per cent YoY surge, with 65 per cent of leasing volume led by manufacturing sector occupiers — the highest share for the city since H1 2023, the report highlighted.

–IANS

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