E-commerce Surge Drives Record I&L Leasing in H1 2025

CBRE South Asia Pvt. Ltd., India’s top real estate consultancy, released its H1 2025 report ‘India Industrial & Logistics Figures’, revealing that leasing activity in the industrial and logistics (I&L) sector reached a historic high of 27.1 million sq. ft. across eight major cities — a 63% rise compared to H1 2024.

The leasing momentum was led by the third-party logistics (3PL) sector with a 32% share. However, the most significant growth came from the e-commerce sector, which expanded its share dramatically from 9% in H1 2024 to 25% in H1 2025. Engineering and manufacturing (E&M) followed with a marginal increase from 18% to 19% over the same period.

The leasing boost in e-commerce was largely attributed to rising consumer demand, quicker delivery requirements, and preparation for the festive season. Government initiatives such as the PLI scheme and Make in India 2.0 have bolstered manufacturing, increasing warehousing needs for E&M players.

During Q2 2025 alone, leasing activity rose 86% year-on-year to 14.6 million sq. ft. In this quarter, 3PL players accounted for 33% of leasing, and e-commerce held 24% — a significant jump from 9% in Q2 2024.

Notably, leasing by multinational companies from APAC, the Americas, and EMEA surged to 43% of total Q2 leasing, up from 19% in Q2 2024. APAC firms led with 2.7 mn. sq. ft., followed by American (1.9 mn. sq. ft.) and EMEA companies (1.7 mn. sq. ft.).

City-wise Jan–Jun 2025 Leasing:

Delhi-NCR: 7.3 mn. sq. ft.
Bengaluru: 4.0 mn. sq. ft.
Hyderabad: 3.6 mn. sq. ft.
Kolkata: 3.3 mn. sq. ft.
Mumbai: 2.9 mn. sq. ft.
Chennai: 2.3 mn. sq. ft.
Pune: 2.2 mn. sq. ft.
Ahmedabad: 1.4 mn. sq. ft.

In terms of supply, 16.7 mn. sq. ft. was added in H1 2025, with Bengaluru, Chennai, and Mumbai contributing 57% of the total. Delhi-NCR led demand with 7.3 mn. sq. ft. of leasing activity.

CBRE Chairman & CEO Anshuman Magazine stated, “The dominance of 3PL and e-commerce, which together contributed to over 50% of the demand, highlights changing consumer expectations and the push for supply chain efficiency. The next growth phase will be shaped by sustainable, premium-grade facilities and expansion into Tier-II markets.”

Ram Chandnani, Managing Director – Leasing, CBRE India, added, “The sustained leasing and institutional interest in high-quality assets reflect the strong confidence of developers and occupiers in the I&L space. The industry is rapidly evolving with focus on advanced infrastructure and Tier-II outreach.”

Outlook:
The rest of 2025 is expected to see continued warehousing demand, with 3PL, e-commerce, and retail sectors driving growth. Higher rental premiums are expected for compliant, investment-grade assets in cities like Delhi-NCR, Mumbai, and Bengaluru. Developers are focusing on Tier-II markets and projects near infrastructure corridors.