New Delhi, Dec 24 (IANS): Annual leasing volume in the logistics and industrial real estate space in India is likely to exceed 50 million square feet (MSF) for the third year in a row, and this strong momentum is likely to prevail in the coming year too, according to a report on Tuesday.

As of October, the leasing volume had already surpassed 41 MSF across the top eight real estate markets, according to a Cushman & Wakefield report.

Ever since the production-linked incentive (PLI) scheme was introduced by the government in 2020, the industrial leasing volume witnessed healthy growth.

Besides, the strong emergence of retail and e-commerce has led to intense activity in the warehousing space too.

“For 2025, we foresee the new-normal level of demand to sustain given the widening of the consumption base in India alongside robust industrial activity witnessed in recent years. India is also a beneficiary of the China+1 diversification strategy followed by global manufacturing firms,” the report mentioned.

Surge in the engineering and manufacturing sector growth, strengthening third-party logistics (3PL) operators and retail industry are primary drivers of demand for the logistics and industrial space in recent years, and these factors will continue to remain key drivers for 2025 as well.

Cities such as Pune, Chennai and Bengaluru have seen healthy leasing volumes in recent years, while other cities exhibit a positive outlook, said the report.

“We anticipate the demand for logistics and industrial spaces to remain robust in 2025, supported by India’s expanding retail consumption base and continued manufacturing growth,” said Abhishek Bhutani, Managing Director, Logistics and Industrial and Ahmedabad, Cushman & Wakefield.

Additionally, “we anticipate 25 million square feet of Grade-A warehousing supply to hit the market over the next 2-3 years, concentrated in West and South India with major projects in Mumbai, Pune, Chennai and Bengaluru,” he mentioned.