Will India’s manufacturing leasing capture 46% of the industrial and logistics market by 2027?
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Synopsis
As India’s manufacturing leasing activity skyrockets, reaching 33.7 million square feet by 2027, a significant transformation in the industrial real estate landscape is underway. Discover how this sector is reshaping the market dynamics and what it means for the future of logistics.
Key Takeaways
- Manufacturing leasing in India is expected to reach 33.7 million square feet by 2027.
- It will represent 46 percent of the total industrial and warehousing absorption.
- Pune and Chennai lead in demand, making up 75 percent of total activity.
- There is a notable increase in the demand for Grade A properties.
- Modern facilities emphasize sustainability and advanced specifications.
New Delhi, Dec 3 (NationPress) The leasing activity in India’s manufacturing sector is anticipated to soar to 33.7 million square feet by 2027 across the top eight cities, which constitutes nearly half of the country’s total industrial and warehousing absorption, according to a report released on Wednesday.
The domestic manufacturing industry is significantly transforming the industrial real estate sector through remarkable leasing activities and changing space demands.
As per a JLL report, manufacturing leasing has shown extraordinary growth, reaching 22.1 million sq ft in 2024.
The demand for manufacturing space is expected to hit 34 million sq ft by 2027, accounting for 46 percent of India’s overall industrial and warehousing absorption, underscoring the sector’s commanding market presence.
Demand for Grade A properties has surged, climbing from 70 percent in 2019 to 82 percent in 2024, and is projected to reach 87 percent by Q3 2025 in the top eight cities.
This upward trend illustrates growing needs for customized high-end specifications, primarily driven by sectors such as automotive and its ancillaries, electronics, white goods, and engineering.
Yogesh Shevade, Head of Industrial and Logistics, India, JLL, stated, “The remarkable seven-fold increase in manufacturing leasing activity from 2020 to 2024 reflects a significant shift in manufacturers' real-estate strategies and decision-making regarding leased land and buildings.”
Grade A facilities are increasingly favored by manufacturers due to their capacity to accommodate automation, superior infrastructure, and sustainable practices, he added.
Furthermore, this demand surge is characterized by improved building specifications, stricter hygiene standards, the need for sustainable and green buildings, and comprehensive safety compliance, which sets modern manufacturing facilities apart from traditional logistics operations.
As of Q3 2025, Pune and Chennai have emerged as the leading markets for manufacturing leasing among India’s eight tier I cities, collectively making up 75 percent of total demand for manufacturing leasing spaces.
Other cities like Bengaluru, Mumbai, and Delhi-NCR are also witnessing rapid growth, further boosting overall leasing momentum, the report concluded.
Point of View
It is evident that the rapid growth of manufacturing leasing in India underscores a fundamental shift in industrial strategies. This trend not only reflects the evolving landscape of real estate but also the adaptability of the manufacturing sector to meet modern demands. Emphasizing sustainability and advanced infrastructure will be crucial for maintaining this momentum.
NationPress
03/12/2025
Frequently Asked Questions
What is the projected manufacturing leasing activity in India by 2027?
India's manufacturing leasing activity is projected to reach 33.7 million square feet by 2027.
Which cities are leading in manufacturing leasing activities?
Pune and Chennai are currently the dominant markets, together accounting for 75 percent of total demand.
What percentage of total industrial absorption will manufacturing leasing represent?
Manufacturing leasing is expected to account for 46 percent of India's total industrial and warehousing absorption by 2027.
What factors are driving the demand for Grade A properties?
The demand is driven by the need for better automation capabilities, enhanced infrastructure, and a sustainable ecosystem.
What sectors are influencing the growth of manufacturing leasing?
The automotive, electronics, white goods, and engineering sectors are significantly influencing the growth in manufacturing leasing.
