Manufacturing to drive nearly half of India’s industrial real estate by 2027

JLL projects manufacturing to drive 46% of India’s industrial real estate by 2027, with 34M sq ft demand led by auto, electronics & engineering sectors

India’s industrial real estate market is set for a major transformation, with manufacturing projected to account for 46% of total absorption by 2027, according to a new report. The consultancy estimates leasing demand will reach 34 million sq. ft across the top eight cities, underscoring the sector’s growing dominance.

The surge is being powered by the automobile, electronics, and engineering industries, alongside government incentives for advanced manufacturing clusters. From Make in India to Made by India: Advanced Manufacturing Real Estate Lifecycle, highlights that Grade A property demand has risen sharply—from 70% in 2019 to 82% in 2024, and further to 87% by Q3 2025. This reflects the increasing need for high-end, customised facilities tailored to modern manufacturing requirements.

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Enhanced building specifications, stricter hygiene standards, sustainability features, and comprehensive safety compliance are driving demand for advanced facilities, setting them apart from traditional logistics spaces. In 2024 alone, manufacturing leasing surged to 22.1 million sq. ft, with continued expansion expected in the coming years.

Among Tier I cities, Pune and Chennai have emerged as leaders, together accounting for 75% of total manufacturing leasing activity as of Q3 2025. Bengaluru, Mumbai, and NCR are also witnessing rapid growth, further accelerating momentum across the sector.

With strong fundamentals, rising demand, and supportive policies, India’s manufacturing boom is poised to reshape the country’s industrial real estate landscape, positioning the sector as a cornerstone of urban and economic growth.

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