Core Insights - The industrial and warehousing sector in India experienced significant growth in 2025, with total absorption reaching nearly 37 million sq ft, marking a 16% year-on-year increase, the highest in recent years [8][10] - Delhi NCR and Chennai emerged as the leading industrial hubs, accounting for 24% and 22% of annual absorption respectively, together contributing over 45% of total leasing [10][8] - The demand was primarily driven by 3PL players, who accounted for about 32% of total leasing, alongside engineering and e-commerce sectors [6][10] Leasing Activity - Q4 2025 saw a strong leasing momentum with 10.4 million sq ft absorbed, driven by large transactions and expansion-led demand [10] - Large-format transactions (200,000 sq ft and above) made up around 45% of total absorption, with 61% of quarterly absorption in the e-commerce segment coming from large-format deals [7][10] - Chennai and Pune together accounted for 56% of quarterly leasing, indicating a high degree of regional concentration [2][10] Market Dynamics - Bhiwandi in Mumbai was identified as the most active micro-market, with approximately 4.9 million sq ft of Grade A space uptake [2][10] - Major deals included Scootsy Logistics leasing 580,700 sq ft in Bhiwandi and Amazon taking up 500,000 sq ft in Delhi NCR, highlighting the confidence of occupiers [10][5] - The average rental rates across key industrial and warehousing clusters increased by 5-10% during the year, reflecting sustained demand and limited availability of quality Grade A space [9][10] Supply and Vacancy - Developers added 41.7 million sq ft of new Grade A space in 2025, a 15% year-on-year increase, with Delhi NCR contributing nearly 30% of total completions [8][10] - Despite the significant supply pipeline, vacancy levels remained stable at around 16% at the end of 2025, supported by healthy absorption in active micro-markets [9][10] - The final quarter of 2025 saw around 13 million sq ft of new completions, representing a sharp 40% year-on-year growth [8][10]