Industrial and warehousing demand in Mumbai and Pune saw a sharp decline in the first quarter of 2025, according to a new report by Colliers India. Gross leasing activity in Mumbai plummeted by 47%, with volumes dropping from 19 lakh square feet to 10 lakh square feet compared to the same period last year. Pune experienced a similar trend, with a 46% fall in demand, from 13 lakh to 7 lakh square feet.

Despite the regional slowdown, India’s overall industrial and warehousing market remained resilient. Leasing activity across the top eight cities rose by 15%, climbing from 78 lakh square feet in Q1 2024 to 90 lakh square feet in Q1 2025. This growth was fueled by ongoing shifts in supply chain strategies and significant infrastructure investments, keeping occupier interest strong in key logistics hubs.

Engineering and e-commerce companies led the demand during the quarter, each leasing nearly 20 lakh square feet of space. Third-party logistics (3PL) firms also contributed significantly, while the automobile sector maintained steady momentum by absorbing around 13 lakh square feet of Grade A warehousing space. This trend highlights the sector’s focus on operational consolidation and geographic expansion.

Supply kept pace with demand, with new project deliveries across major markets reaching 94 lakh square feet — a 16% increase over the 81 lakh square feet delivered during the same period last year. Factors like robust institutional investments, improved last-mile connectivity, and the growing influence of e-commerce drove this expansion.

Colliers also noted a shift in occupier preferences, with more companies opting for larger, modern spaces that support operational efficiency, regulatory compliance, and sustainability initiatives. These trends reflect broader structural changes underway in India’s logistics sector.

Supported by positive macroeconomic indicators, strong investor interest, and consistent occupier confidence, the industrial and warehousing sector is poised for further growth. Top-tier cities continue to lead the transformation, offering high-quality infrastructure and strategic locations that align with the evolving needs of modern supply chains. Early trends in 2025 suggest a bright outlook for all stakeholders in the warehousing and industrial property ecosystem.

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