India`s manufacturing leasing to take 46 pc share of industrial, logistics market by 2027
India’s manufacturing leasing activity is projected to reach 33.7 million square feet by 2027 in the top eight cities -- representing nearly half of India’s total industrial and warehousing absorption, a report showed on Wednesday.
The domestic manufacturing sector is fundamentally reshaping the industrial real estate landscape through phenomenal leasing activity and evolving space requirements.
Manufacturing leasing activity has demonstrated exceptional growth, reaching 22.1 million sq ft in 2024, according to a JLL report.
Manufacturing space demand is forecasted to reach 34 million sq ft by 2027, representing 46 per cent of India’s total industrial and warehousing absorption -- a clear indication of the sector’s dominant market position.
Grade A property demand has experienced substantial growth, rising from 70 per cent in 2019 to 82 per cent in 2024 and reaching 87 per cent through Q3 2025 in the top eight cities.
According to the report, 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 seven-fold increase in manufacturing leasing activity between 2020 and 2024 indicates a growing shift of manufacturers’ real-estate strategy and decision-making in choosing leased land and building,” said Yogesh Shevade, Head of Industrial and Logistics, India, JLL.
Grade A facilities are preferred by most manufacturers, given their ability to handle automation, better infrastructure, and a sustainable ecosystem, he mentioned.
Moreover, the demand surge is characterised by enhanced building specifications, stricter hygiene standards, demand for sustainable and green buildings, 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 among India’s eight tier I cities for manufacturing leasing activity, collectively accounting for 75 per cent of total demand for manufacturing leasing spaces.
Other cities like Bengaluru, Mumbai, and Delhi-NCR are also experiencing rapid growth, further accelerating the overall leasing momentum, said the report.
