Reshaping Industrial and Logistic Real Estate

India’s ambition to become a global manufacturing hub is significantly reshaping its industrial and logistics real estate market. Manufacturers are increasingly demanding advanced, compliant, and future-ready Grade-A facilities to support automation, modern production processes, and capital-efficient expansion.

Manufacturing has emerged as the strongest driver of industrial and logistics leasing, with light manufacturing space across India’s top eight cities rising sharply from 3.2 million sq ft in 2020 to 22.1 million sq ft in 2024. Leasing is expected to reach 25.4 million sq ft in 2025 and nearly 34 million sq ft by 2027, accounting for almost half of total absorption.

Grade-A facilities are preferred due to their ability to support automation, sustainability standards, better infrastructure, and regulatory compliance. Reflecting this shift, the share of Grade-A manufacturing space in total leasing has increased from 70% in 2019 to 82% in 2024, and further to 87% by Q3 2025.

Developers are responding with increased investment in high-specification, automation-ready, and green-certified assets. At the same time, manufacturers are adopting lease-first strategies to optimise capital usage, with ready-built and built-to-suit facilities gaining popularity—particularly in Pune, Chennai, and NCR, which together account for over 76% of demand.

Overall, manufacturing-led demand is set to remain the key growth engine for India’s industrial and logistics real estate ecosystem.

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