India’s Manufacturing Leasing Posts 49% CAGR Since 2021, JLL Report Says

India's gross manufacturing leasing has reached a cumulative 69 million sq ft, registering a compound annual growth rate of 49 per cent since 2021, a report said on Wednesday. India’s manufacturing sector is witnessing an unprecedented transformation, with leasing demand for industrial spaces projected to capture 40 per cent of the market by 2030, the report from commercial real estate services firm JLL said.

Manufacturing has now emerged as the second-largest occupier segment after third-party logistics (3PL), signaling a fundamental restructuring of India’s industrial real estate hierarchy. Gross absorption touched 19.2 million sq. ft. in 2025, and H1 2026 recorded 10.2 million sq. ft.—a 19 per cent year-over-year increase for the first half. With manufacturing leasing absorption forecast to reach approximately 46 million sq. ft. by 2030, the sector's trajectory underscores India's evolution toward becoming a global manufacturing powerhouse aligned with its Vision 2047 aspirations, the report noted.

"The growth in the manufacturing real estate asset class reflects two distinct yet complementary strategies shaping India's industrial landscape. Tier-I cities are witnessing aggressive leasing of Grade-A facilities as manufacturers prioritise speed-to-market and be capex-light due to paucity of affordable land," said Yogesh Shevade, Managing Director, Industrial & Logistics, India, JLL.

Simultaneously, Tier-II markets are seeing manufacturers opt for land acquisition, seeking greater customisation and long-term operational control, Shevade said. Both approaches signal robust manufacturing commitment; whether through leasing or ownership, India is becoming the factory floor of choice, he added. Grade-A properties captured 90 per cent of manufacturing leasing in 2025 and the shift toward high-specification facilities reflects stringent adherence to enhanced building standards, hygiene protocols, and safety norms. Nearly 14 emerging markets including Lucknow, Jaipur, Chandigarh tri-city, Bhubaneswar, Guwahati, Surat, Nagpur, Nashik, Goa, Indore, Sambhajinagar, Tuticorin, Coimbatore & Vizag are witnessing manufacturers prioritise land transactions over leasing, reflecting diverse regional strategies aligned with specific operational requirements.

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