365Telugu.com online news,National, July 2nd 2025: India’s industrial and warehousing sector recorded robust growth in the first half of 2025, with total absorption reaching 34 million sq. ft., representing a 24.5% year-on-year increase compared to 27.3 million sq. ft. in H1 2024, according to Savills India, a global real estate advisory firm.
The growth was driven primarily by the manufacturing sector, which increased its share of total absorption from 22% in H1 2024 to 32% in H1 2025. The e-commerce segment also showed strong momentum, nearly doubling its share from 6% to 11% over the same period. Meanwhile, demand for Grade A warehouses continued to rise, with its contribution growing from 39% in H1 2024 to 55% in H1 2025.
Tier II and III cities collectively accounted for 23% of total absorption and 18% of new supply in H1 2025, reflecting their growing importance as industrial and warehousing hubs. Tier I cities, including Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, Delhi-NCR, and Pune, contributed 77% of total absorption and 82% of total supply.
On the supply front, 33.4 million sq. ft. of new space entered the market in H1 2025, an 18.4% year-on-year increase from 28.2 million sq. ft. in H1 2024.
Key highlights from Savills India findings:
- Manufacturing segment: rose from 22% share of absorption in H1 2024 to 32% in H1 2025, supported by Central and State-level incentives like the PLI scheme.
- E-commerce segment: doubled from 6% to 11% contribution to absorption.
- Grade A spaces: share of demand climbed from 39% to 55%, while Grade A supply grew from 49% to 58%, driven by rising ESG and compliance standards.
- 3PL segment: saw a decline in share from 33% to 26% due to supply chain optimization by FMCG/FMCD players.
- Tier II & III cities: accounted for 23% of demand and 18% of supply, confirming their emergence as key growth engines beyond traditional metros.
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City-wise highlights:
- Delhi-NCR led with 19% of overall absorption in H1 2025
- Pune and Mumbai followed at 15% each
- Bengaluru accounted for 10%
- Tier II & III cities contributed 23%
In terms of supply, Delhi-NCR led with 18%, followed by Pune at 17%, Mumbai at 16%, and Tier II & III cities collectively at 18%.
Srinivas N, Managing Director, Industrial and Logistics, Savills India, commented:
“India’s industrial and logistics sector is on track for significant expansion, with projected absorption expected to cross 65 million sq. ft. in 2025. The growth is being driven by the manufacturing sector, sustained third-party logistics (3PL) demand, and the rapid rise of Q-commerce players reshaping supply chains.
Tier II and III cities are increasingly becoming integral to sourcing, consumption, and distribution, creating tremendous opportunities for developers, investors, and occupiers, and strengthening India’s position as a global logistics and manufacturing hub.”
By the end of 2025, Grade A spaces are projected to account for over 60% of both total supply and absorption, reinforcing the sector’s commitment to higher standards in quality, compliance, and sustainability.