Growth momentum continues with record net absorption of 9.8 mn sq ft in 2025

• The year 2025 witnessed a record high net absorption of 9.8 mn sq ft with more than 70% of the demand for Grade A space. This clearly denotes the shift in occupiers’ preference toward good quality spaces with higher specifications.
• Delhi – NH8 led the submarkets in terms of demand, driven by the established physical ecosystem including infrastructure projects such as WDFC and DMIC. 3PL and E-Commerce players are driving the demand (more than 50%) followed by FMCG, retail and auto ancillaries.

Grade A vacancy reduced by 590 bps y-o-y reaching 8.5% in 2025

• New supply of 9.3 mn sq ft was added in 2025, of which 5.1 mn sq ft was attributed as Grade A. Institutional investors have also started expanding their presence in the market. Delhi-NH8 witnessed the highest new supply with rising traction from institutional investors.
• Vacancy reduced by 240 bps y-o-y with demand outstripping supply. The Grade A vacancy has reduced from 14.4% in 2024 to 8.5% by end-2025 driven by the rising demand for good quality spaces from consumption-led sectors.

Rental growth driven by institutional supply

• Robust demand for Grade A space, reduction in vacancy and rising traction from institutional investors, have all driven a 3.2% y-o-y increase in rents. Rising land costs are also contributing to this upward trend.
• Rents are expected to rise further, due to increased investment from institutional players such as Indospace, Horizon Industrial Parks, ESR, LO-GOI, Ascendas, Welspun, Prologis, Panattoni, NDR InvIT & others as well as demand for spaces with higher specifications.

Outlook: NCR warehousing stock set to exceed 120 mn sq ft by 2026 with Grade A vacancy to stay below 10%

• NCR warehousing stock is projected to cross 120 mn sq ft in 2026, primarily driven by Grade A projects backed by institutional investors. The Delhi-NH8 submarket is expected to maintain its high level of activity, leading in both supply and demand.
• Proposed freight corridors such as DMIC, WDFC, and EDFC, are boosting warehousing demand by connecting Delhi to Western & Eastern India. Moreover, with the increasing e-commerce & 3PL growth, Grade A vacancies are expected to hover below 10% for the next four years.