New Delhi, March 5 (NationPress) The Indian real estate sector has witnessed a remarkable 29% year-on-year (YoY) surge in warehousing demand, reaching 72.5 million sq ft, the highest growth recorded since the pandemic, according to a report released on Thursday.

Property consultancy Knight Frank India highlighted that Q4 2025 emerged as the most robust quarter of the year, showcasing 23.4 million sq ft in transaction volumes.

Occupiers showed a clear preference for Grade A facilities, which constituted 63% of leased space in 2025, up from 62% in the previous year, the report indicates.

Manufacturing occupiers (excluding FMCG and FMCD) continued to lead the charge, accounting for 47% of the total demand, with 34 million sq ft transacted in 2025, marking a significant 55% YoY increase.

The industrial and warehousing sectors in India demonstrated exceptional performance in 2025, fueled by ongoing demand from manufacturing, third-party logistics (3PL), e-commerce, and related sectors, the report added.

Pune emerged as the standout market, recording 16 million sq ft in transactions, an impressive 86% YoY growth, capturing 22% of total transaction volumes. Notably, manufacturing transactions were heavily concentrated in Pune and Chennai, together accounting for 51% of manufacturing leasing activity throughout the year.

Shishir Baijal, International Partner, Chairman and Managing Director of Knight Frank India, stated, “With global trade undergoing realignment and a surge in infrastructure investments, we are optimistic that India will solidify its status as a preferred manufacturing and distribution hub, ensuring sustained demand for high-quality, institutional-grade warehousing in the future.”

Mumbai dominated the market with a 31% share of total stock, followed by the NCR region at 21%. All markets, except Kolkata and Hyderabad, experienced growth in transaction volumes. This distribution of activity indicates a maturing market where capital and occupiers are increasingly aligning with established manufacturing ecosystems, particularly in Pune, according to the report.

The performance of the market reinforces India’s expanding role as a resilient and strategically positioned hub within global and regional supply chain networks, the firm noted. Vacancy rates remained stable at 11.6% during the year.

Furthermore, space absorption by e-commerce companies increased significantly, rising 56% YoY in 2025, with 7.8 million sq ft being the highest annual volume recorded since 2021.

aar/pk