Manufacturing leasing set to hit nearly half of India’s industrial and logistics demand

JLL projects that it will continue to expand to 33.7 million square feet by 2027.

India’s manufacturing leasing is projected to expand up to approximately 33.7 million square feet by 2027. This is 46% of India’s total industrial and logistics absorption, according to JLL.

The projection follows a pattern of continuous growth in manufacturing absorption. In 2024, it reached 22.1 million square feet.

“The seven-fold increase in manufacturing leasing activity between 2020 to 2024 indicates a
growing shift of manufacturer’s real-estate strategy and decision-making in choosing leased land and building,” Yogesh Shevade, Head of Industrial and Logistics, India, JLL.

Grade A property demand has experienced substantial growth, rising from 70% in 2019 to 82% in 2024 and reaching 87% through the third quarter (Q3) of 2025 in the top eight cities. This upward trajectory reflects increasing requirements for customised high-end specifications, particularly driven by the Auto and Ancillaries, Electronics and White Goods, and Engineering sectors.

The demand surge is characterised by enhanced building specifications, stricter hygiene standards, demand for sustainable or green building and comprehensive safety compliance requirements that distinguish modern manufacturing facilities from traditional logistics operations.

As of Q3 2025, Pune and Chennai emerged as the dominant markets amongst India’s eight Tier I cities for manufacturing leasing activity, collectively accounting for ~75% of total demand for manufacturing leasing spaces.

Other cities like Bengaluru, Mumbai, and NCR are also experiencing rapid growth, further accelerating the overall leasing momentum.

“Grade A facilities are preferred by most manufacturers, given their ability to handle automation, better infrastructure and a sustainable ecosystem,” Shevade said.