In 2024, the industrial and warehousing sector in India recorded a total of 25.6 million square feet of gross leasing activity across the top five metropolitan areas. This represented a modest 2% Year-on-Year (YoY) growth, despite a slight dip in leasing transactions during the Q4 of FY25. Strong absorption rates in earlier quarters, however, ensured leasing stability for the year.

Among the key markets, Delhi National Capital Region (NCR) led the demand with a 26% market share, followed closely by Chennai at 23%. The Q4 FY25 witnessed about 5.5 million square feet of leasing demand, with Pune and Bengaluru accounting for over half of the total demand. Third-party logistics (3PL) companies remained the dominant contributors to this demand, accounting for 33% of the total activity, while the engineering and electronics sectors also saw increased activity.

A noteworthy trend in 2024 was the significant contribution of large leasing deals, with transactions of 2,00,000 square feet or more making up 40% of the total demand. 3PL companies and the engineering sector were the largest players driving these large leasing transactions. This trend reflects the growing demand for larger spaces to support logistics and industrial operations in key sectors.

In terms of new supply, the industrial and warehousing space saw a 22% YoY increase, amounting to over 28 million square feet in 2024. Nearly 10 million square feet of this new supply was concentrated in Delhi NCR, further underscoring the region's dominance in industrial leasing. This surge in supply reflects developer confidence and a positive outlook for the sector's future growth.

The rental prices in key micro-markets grew by 5-10%, indicating a steady demand for high-quality industrial and warehousing spaces. Vacancy rates in the industrial sector remained stable at 13-14%, further affirming the market's strength and resilience. As a result, Delhi NCR emerged as the leading destination for industrial and warehousing demand in 2024, reaffirming its position as a key hub for industrial activity.

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