Bengaluru, April 23 (NationPress) The demand for industrial and warehousing space in the eight major cities of India remained strong, reaching 9 million square feet (sq ft) in Q1 2025, marking a 15 percent growth compared to the previous year, according to a report released on Wednesday.

Delhi-NCR and Chennai were the frontrunners in this demand, together making up approximately 57 percent of the total leasing activity in Q1. The appetite for Grade A industrial and warehousing spaces was notably high in Delhi-NCR, as highlighted in a report by Colliers.

The engineering sector emerged as a significant contributor to this demand, accounting for around 25 percent of the total uptake in industrial and warehousing spaces, followed closely by the e-commerce sector, which contributed 21 percent.

Both sectors outperformed the typical leaders, the Third Party Logistics (3PL) companies. While Chennai and Bengaluru experienced substantial demand from the engineering sector, e-commerce maintained strong traction in Delhi-NCR and Mumbai, as noted in the report.

“The automobile sector also secured a notable amount of Grade A industrial and warehousing space, totaling 1.3 million sq ft. These trends are positive indicators of overall growth, reflecting a broad-based demand that aligns with domestic macro-economic trends,” stated Vijay Ganesh, Managing Director of Industrial and Logistics Services at Colliers India.

The engineering and e-commerce sectors were the primary drivers of leasing activities this quarter, collectively representing about 46 percent of the demand.

Engineering firms alone accounted for approximately 2.2 million sq ft of leasing, which is around one-fourth of the Grade A industrial and warehousing demand in Q1 2025. This sector witnessed more than double the growth in leasing activity compared to the previous year, primarily fueled by strong demand in Chennai and Bengaluru.

The e-commerce sector also contributed nearly 2 million sq ft of leasing, predominantly in Delhi-NCR and Mumbai, according to the report.

During the first quarter of 2025, significant transactions (over 200,000 sq ft) constituted 48 percent of the total demand, amounting to 4.3 million sq ft. These larger deals were primarily instigated by e-commerce companies, with engineering and automobile firms following suit.

The first quarter of 2025 saw new supply reach 9.4 million sq ft, reflecting a 16 percent annual increase. This new supply closely matched the strong leasing activity during the quarter, indicating a rise in developer confidence within the industrial and warehousing market, as per the report.