India Warehousing Outlook – Q1 CY 2025
Resilient Growth in Warehousing: Demand Outpaces Supply in Q1 CY 2025
India’s warehousing sector, particularly Grade A and A+ assets, continues its robust performance in Q1 CY 2025. The Pan-India demand touched 10.1 million sq. ft (msf), surpassing the supply of 9.0 msf. This marks a clear shift toward high-quality logistics infrastructure, driven by the rise in consumption and supply chain modernization.
Vacancy rates for Grade A/A+ stock declined to 7.0%, a 120 basis points YoY drop, indicating tightening availability across key warehousing hubs. The absorption-to-supply ratio stood strong at 1.1x, showing that demand is outpacing new supply additions.
Regional Leaders: MMR and Pune Dominate the Market
The Mumbai Metropolitan Region (MMR) and Pune together accounted for 61% of Pan India demand and 59% of total supply. Pune, in particular, saw high absorption with a demand-to-supply ratio of 1.7x and vacancy of just 3.8%. MMR remained vibrant with major transactions from Zomato Hyperpure and DHL, although vacancy increased slightly to 8.5%.
Other major contributors:
Delhi-NCR: 0.8 msf demand, with strong rent growth of 4% in last 12 months
Bengaluru: Demand surged by 69% QoQ, vacancy at 11.8%
Chennai: Maintained balance with 1.4 msf demand and 4.8% vacancy
Hyderabad: Modest demand of 0.2 msf but improving vacancy at 9.6%
Sectoral Trends and Rental Insights
The warehousing demand was largely driven by 3PL (Third-Party Logistics), Manufacturing, and Automotive sectors. The 3PL sector alone contributed 34% of the demand. E-commerce and electronics also showed growing interest in cities like Bengaluru and Hyderabad.
On a national level, Grade A/A+ passing rents rose 4% YoY, with sharp upticks noted in NCR and MMR.
Q1 CY 2025 underscores India’s growing appetite for high-quality warehousing. With vacancy rates dropping and rents inching up, the market reflects increasing tenant preference for Grade A/A+ facilities. Regions like Pune and MMR remain frontrunners, while cities like Bengaluru and Chennai are showing strong growth potential. The sector is poised for continued expansion, driven by demand from logistics, e-commerce, and manufacturing players.
