Industrial & Logistics Sector Marks 21.7% YoY Growth in Q3 2025: Savills India

New Delhi, October 6, 2025: India’s industrial and logistics sector recorded its strongest quarter on record in Q3 2025, with gross absorption rising 21.7 per cent YoY to 21.3 million square feet (msf). Cumulative absorption for the first nine months of 2025 touched 55.3 msf, up 23.4 per cent YoY, according to international real estate advisory firm Savills India. At the same time, new completions grew by 11.9 per cent YoY to 21.6 msf in Q3 2025, taking the first nine months cumulative supply to 55.0 msf (+15.8 per cent YoY), underscoring the sector’s robust development pipeline, consolidating the country’s position as one of the world’s fastest-growing industrial & warehousing markets.

“India’s industrial and warehousing sector is entering a defining phase, with 2025 and 2026 expected to set new benchmarks in both demand and supply. The sector is undergoing a significant transformation, driven by the expansion of manufacturing, rising demand for modern Grade-A distribution facilities, and the rapid development of Tier-II and Tier-III cities. Government initiatives, coupled with inclusive policies focused on infrastructure and manufacturing, have attracted positive responses globally bringing in increased equity and investor confidence. As a result, India is steadily emerging as a global hub, repositioning itself as a key industrial and distribution destination,” said Srinivas N, Managing Director, Industrial & Logistics, Savills India.

Tier-I cities dominated absorption with 17.8 msf (84 per cent share), while Tier-II and III cities added 3.5 msf (16 per cent). Demand was primarily fueled by a surge in manufacturing activity, alongside steady requirements from 3PL and e-commerce occupiers. Tier- I cities include Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, Delhi-NCR, and Pune. Tier- II and Tier-III cities include Guwahati, Bhubaneshwar, Patna, Hosur, Coimbatore, Rajpura, Lucknow, Jaipur, Nagpur, Surat, Indore, Kochi, Hubli, Vizag, Belgaum and Anantapur.

Grade-A facilities continued to dominate the market, contributing 52 per cent of total absorption in Q3 2025, indicating the growing demand for grade-A compliant space. On the demand side, manufacturing emerged as the fastest-growing segment, expanding its share to 27 per cent from 16 per cent a year ago, while 3PL players maintained steady momentum. E-commerce also strengthened its position, rising to 10 per cent of total absorption, underscoring the sector’s growing role in shaping India’s warehousing landscape.

Delhi-NCR led with 21 per cent of the total absorption, followed by Mumbai and Pune at 15 per cent each, and Bengaluru at 11 per cent. On the supply front, Mumbai accounted for 18 per cent of the overall supply, followed by Delhi-NCR and Pune at 15 per cent each, and Bengaluru at 14 per cent.

Looking forward, India’s industrial and logistics sector is poised for a defining year in 2025, with supply and absorption surpassing 70 million sq. ft. Growth will be led by 3PL and manufacturing, alongside sustained demand from retail, FMCG, and FMCD. Tier-II and Tier-III cities are emerging as vital hubs, supported by the rapid expansion of e-commerce as it enhances urban distribution networks and deepens its presence beyond metro markets. Demand for Grade-A facilities continues to strengthen, driven by quality, compliance, and strong investor interest.