Southern Corridor Ignites Industrial Surge: Bengaluru, Chennai, Hyderabad Lead 58% Warehousing Leasing Boom

Southern Corridor Ignites Industrial Surge: Bengaluru, Chennai, Hyderabad Lead 58% Warehousing Leasing Boom​

India's industrial and warehousing sector is demonstrating robust momentum, led by the southern metropolitan triangle. Bengaluru, Chennai, and Hyderabad reported a significant 58 per cent surge in leasing activities for industrial and warehousing spaces during the January-March period. This growth signals strong underlying demand fueled by e-commerce, logistics, and light manufacturing expansion across the region.

According to data compiled by Colliers India, the total leasing volume in these three southern powerhouse cities hit 4.9 million sq ft. This figure represents a substantial increase compared to the 3.1 million sq ft reported in the year-ago period.

Southern Metros Drive Record Industrial Leasing​

The demand drivers show a clear concentration in the southern corridor. Bengaluru saw its leasing capacity more than double, recording 1.7 million square feet from a previous 0.8 million square feet.

Chennai also reported considerable growth, with leasing activities rising 15 per cent to 2.3 million square feet, up from 2 million sq ft. Hyderabad experienced the most dramatic expansion, jumping threefold to secure 0.9 million square feet, vastly exceeding the 0.3 million sq ft recorded a year prior.

National Real Estate Snapshot: Trends Across Major Indian Cities​

While the south set a strong pace, other major metros showed varied activity. Colliers India noted that the total leasing across eight major cities grew 22 per cent, reaching 11 million sq ft in January-March, compared to 9 million sq ft in the preceding year.

Delhi-NCR and Pune showed comparatively stable activity, with both regions logging flat leasing volumes of 3.1 million sq ft and 0.7 million sq ft, respectively. Meanwhile, Mumbai posted solid growth, with leasing increasing 10 per cent to 1.1 million sq ft. Kolkata witnessed a robust 40 per cent increase, bringing its total to 0.7 million square feet from 0.5 million square feet.

Sectoral Drivers and Challenges in Industrial Supply​

Third-party logistics firms, e-commerce entities, and light manufacturing companies have been identified as the primary forces driving this significant demand increase in industrial and warehousing spaces.

However, the market is not uniform. Ahmedabad reported a notable slowdown, with leasing activity dipping 17 per cent to 0.5 million sq ft, down from 0.6 million sq ft in the year-ago period.

Industry Outlook Amid Geopolitical Headwinds​

Commenting on the market, Vijay Ganesh, Managing Director of Industrial & Logistics Services at Colliers India, stated that the long-term fundamentals of India's industrial and warehousing market remain intact.

However, he advised caution regarding supply. Ganesh noted that developers are likely to adopt a measured approach concerning new supply additions in the near term. This caution is attributed to prevailing geopolitical crises and ongoing supply chain disruptions.

Despite these headwinds, Ganesh emphasized that policy support aimed at boosting domestic manufacturing and strengthening logistics capabilities will remain crucial for navigating any potential downside risks in the sector. The data presented pertains exclusively to Grade A buildings, excluding lease renewals, pre-commitments, and deals marked only by a Letter of Intent.

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