The National Capital Region’s (NCR) warehousing market is on track to soar to 108.6 million square feet by the end of 2025. This surge is largely driven by Grade A projects, which have captured the interest of institutional investors, as detailed in a recent report by JLL. The Delhi-NH8 submarket is poised to remain at the forefront of this growth.
“Proposed infrastructure projects, particularly along freight corridors such as DMIC, WDFC, and EDFC, are significantly enhancing warehouse demand by improving connectivity between Delhi and surrounding areas in both Western and Eastern India,” the report stated. Smart investments in these corridors are transforming transportation—and possibly saving future delivery delays that plague today’s e-commerce giants.
Explosive Growth in Demand
In a remarkable showing, net demand for warehousing space soared by an impressive 80% year-over-year in the first half of 2025, reaching 4.13 million square feet. Notably, 88% of this demand stemmed from Grade A facilities, highlighting a clear trend toward high-quality spaces. The Delhi-NH8 remained a powerhouse in this surge.
The third-party logistics (3PL) and logistics sectors emerged as the primary demand drivers, closely followed by light manufacturing fields, such as auto components and engineering, which together constituted 58% of the demand during this period. Other notable contributors included fast-moving consumer goods (FMCG), e-commerce, and retail sectors.
Institutional Developers Make Their Mark
The market has witnessed transformative expansion in the first half of 2025, with 4.66 million square feet of new supply entering the fray. Institutional developers and investors are making a strong entrance—particularly concentrated in the lucrative Delhi-NH8 corridor.
Despite this growth, vacancy rates rose to 21.4% in H1 2025, a reflection of the accelerating supply from large Grade A developers that outstripped demand in the market.
Rising Rents Reflect Market Trends
Rents in the NCR have experienced a healthy uptick, rising by 5.3% year-over-year in the first half of 2025. This increase is primarily a response to the surging demand for Grade A spaces that boast superior specifications. With institutional investors gaining a robust foothold, rents are expected to continue climbing, driven by escalating land prices, forthcoming infrastructure projects, and heightened investments.
As the NCR warehousing market evolves, it’s clear that Grade A facilities will remain the main attraction, drawing interest and investment from across the region. In a landscape where quality is becoming king, businesses are increasingly keen to secure their place in this thriving sector.
Questions & Answers
What factors are driving the demand for Grade A warehouse spaces in NCR?
The demand for Grade A warehouse spaces is primarily driven by strong interest from institutional investors and the significant growth of 3PL and logistics sectors. Additional contributors include light manufacturing fields and e-commerce, all seeking high-quality facilities.
How have recent infrastructure projects influenced the warehousing market?
Recent infrastructure projects, especially along freight corridors like DMIC, WDFC, and EDFC, have improved connectivity, boosting warehouse demand by facilitating smoother transport routes between Delhi and surrounding regions.
What does the future look like for rents in the NCR warehousing market?
Rents are projected to continue increasing as demand for Grade A spaces persists, propelled by rising land prices, ongoing infrastructure developments, and the growing presence of institutional investors in the market.
