India Market Monitor Q2 2025 - Industrial and Logistics

India’s industrial and logistics (I&L) real estate sector demonstrated continued growth in Q2 2025, backed by a robust absorption of 14.6 million sq. ft., registering a significant ~86% Y-o-Y growth. Space take-up by third-party logistics (3PL) and e-commerce companies were pivotal in strengthening the warehousing leasing activity across cities.

Following a strong first half of 2025, we project robust warehousing demand for the upcoming quarters. 3PL, e-commerce, and retail sectors are anticipated to be the primary drivers of this space take-up as they aggressively pursue shorter delivery timelines and re-evaluate their supply chain models.

The prevailing "flight-to-quality" trend, coupled with robust demand for compliant assets—particularly within core markets such as Delhi-NCR, Mumbai, and Bengaluru—is anticipated to widen the rental differential between investment-grade and sub-investment-grade assets.

As the demand for premium, sustainable, and state-of-the-art warehouses continues to grow, we expect a large part of the 2025 supply pipeline to be led by leading developers, backed by institutional investors. Bengaluru, Chennai, Delhi-NCR, and Mumbai are projected to be the primary contributors to this new supply.

To delve deeper into our analysis of India’s I&L real estate landscape, please click on the download button.