84% of the overall absorption was in Delhi-NCR, Mumbai, Bengaluru, Pune, Chennai, and Hyderabad. 16 percent came from Tier-2 and Tier-3 markets including Jaipur, Lucknow, Coimbatore, and Indore.
3PL, E-commerce Fuel Boom
According to statistics from Savills India, India’s industrial and logistics real estate sector had its highest-ever total absorption of 55.3 million square feet in the first nine months of 2025.
A rise in industrial activity has been the main driver of demand, combined with consistent demands from third-party logistics (3PL) and e-commerce players.
Gross absorption reached 21.3 msf in the third quarter alone, rising 21.7 percent from the same time last year. The new supply of Grade-A reached 21.6 msf.
Delhi-NCR, Mumbai, Bengaluru, Pune, Chennai, and Hyderabad were the top six cities, accounting for 84% of the overall absorption. 16 percent came from Tier 2 and Tier 3 markets including Jaipur, Lucknow, Coimbatore, and Indore.
Manufacturing Momentum Drives Growth
The percentage of manufacturing-led absorption increased from 16 percent to 27 percent year over year.
According to Srinivas N, managing director (industrial & logistics) at Savills India, the industrial and warehousing industry in India is about to enter a defining phase, with 2025 and 2026 predicted to establish new standards in both supply and demand.
“The growth of manufacturing, the increasing need for contemporary Grade-A distribution facilities, and the quick development of Tier-II and Tier-III cities are driving a considerable transition in the industry,” he said.
According to him, government programs combined with inclusive policies centered on manufacturing and infrastructure have garnered favorable reactions throughout the world, resulting in a rise in equity and investor confidence.
Tier-2 Markets Gain Momentum
According to the data, tier 2 and tier 3 markets gained 4.0 msf (19 percent), a 37.9 percent YoY rise, while Tier 1 cities supplied the majority of the supply with 17.5 msf (81 percent share) in Q3.
With 52 percent of the overall absorption in the September quarter, Grade-A facilities remained the market leader, demonstrating the rising demand for space that complies with Grade-A standards.
Bengaluru came in at 11%, Mumbai and Pune at 15% apiece, and Delhi-NCR at 21%.
Of the total supply, 18 percent came from Mumbai, 15 percent from Delhi-NCR and Pune, and 14 percent from Bengaluru.
It is anticipated that the supply and absorption of the industrial and logistics sectors would exceed 70 msf by the end of the year. In addition to the ongoing demand from retail, fast-moving consumer goods (FMCG), and fast-moving consumer durables (FMCD), analysts predicted that 3PL and manufacturing would drive the expansion.