Did India’s Warehousing Sector Achieve 50% Leasing Growth in Q1?
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Synopsis
In an impressive start to 2025, India’s warehousing sector has recorded a phenomenal 50% year-on-year growth in leasing volumes. Discover how manufacturing and e-commerce are driving this surge and what it means for the future of logistics in India.
Key Takeaways
- India's warehousing sector experienced a 50% YoY growth in leasing.
- 16.7 million sq ft of space was leased in Q1 2025.
- Manufacturing drove most of the demand, with a 94% increase in leasing.
- The e-commerce sector rose by 151% in space uptake.
- Mumbai accounted for 27% of total transacted volumes.
Mumbai, May 9 (NationPress) The warehousing sector in India has achieved a remarkable leasing volume of 16.7 million square feet during the January-March quarter, reflecting a notable 50% year-on-year (YoY) growth, according to a report released on Friday.
Leasing activity in the top eight markets showed robust performance in Q1 2025, largely fueled by the manufacturing industry, which experienced an impressive 94% increase in leasing volumes, totaling 8 million sq ft in the first quarter, as highlighted in the report by Knight Frank India.
Manufacturing enterprises represented 48% of the overall warehousing demand, emphasizing the sector's persistent growth and favorable long-term investment outlook.
The e-commerce sector also demonstrated significant recovery, achieving a 151% rise in space uptake — although starting from a lower base — signaling renewed growth initiatives.
Meanwhile, third-party logistics (3PL) companies experienced a 12% boost in leasing volumes, but their overall market share dipped to 23%, indicating a shift in the industry dynamics.
Mumbai emerged as the leader with 27% of the total transacted volumes, amounting to 4.4 million sq ft, followed by Pune, Chennai, and NCR, each contributing around 16-17%.
In Pune and Chennai, the manufacturing sector was the main driving force, while 3PL companies boosted market volumes in the NCR. The Chennai and Hyderabad markets showcased the highest volume growth, at 154% and 137%, respectively, as per the report.
“The Indian warehousing market has shown sustained momentum in Q1 2025, even as global supply chains contend with the new tariff landscape. The China+1 strategy increasingly adopted by global companies, along with the government’s focus on ‘Make in India’, continues to support the country’s manufacturing sector,” stated Shishir Baijal, Chairman and Managing Director, Knight Frank India.
The e-commerce sector is also exhibiting signs of recovery, and its trajectory in 2025 will be a significant trend to monitor.
“With ongoing improvements in infrastructure and policy support, India is set to fortify its role as a logistics and industrial powerhouse,” he added.
The demand for Grade A warehousing facilities remained strong in Q1 2025, constituting 59% of all transactions.
Point of View
It is evident that India’s warehousing sector is not just recovering but thriving, with significant contributions from manufacturing and e-commerce. This trend showcases the resilience and potential of the Indian economy, further solidified by government initiatives and global strategies.
NationPress
21/05/2025
Frequently Asked Questions
What was the leasing growth in India's warehousing sector in Q1 2025?
India's warehousing sector achieved a remarkable 50% year-on-year growth in leasing, totaling 16.7 million square feet.
Which industry contributed most to the growth in leasing volumes?
The manufacturing sector was the primary contributor, recording a 94% increase in leasing volumes.
How did the e-commerce sector perform in Q1 2025?
The e-commerce sector showed a notable recovery with a 151% increase in space uptake.
What percentage of total warehousing demand was driven by manufacturing companies?
Manufacturing companies accounted for 48% of the total warehousing demand.
Which city led in warehousing transactions during this period?
Mumbai led with 27% of total transacted volumes, amounting to 4.4 million square feet.
