📉 Demand for Industrial & Warehousing Space Falls 47% in Mumbai & Pune – What It Means for the Sector

A deep dive into the 47% drop in industrial and warehousing space demand in Mumbai and Pune. Explore causes, implications, and expert insights.

📦 Introduction

The industrial and warehousing sector, once a booming segment in Mumbai and Pune, has recently seen a 47% year-on-year decline in demand. This slowdown, as reported in Q1 2025, has raised questions among investors, developers, and logistics players about the sector’s immediate future.

At Sheetal Properties, we’re closely tracking these trends to help our clients make data-driven real estate decisions—whether they’re investors, developers, or logistics operators.

📊 Understanding the 47% Drop – Key Statistics

According to a report by Knight Frank India, the combined warehousing and industrial leasing activity in Mumbai and Pune has declined from 2.5 million sq. ft. in Q1 2024 to 1.3 million sq. ft. in Q1 2025.

📍 Market Highlights:

• Mumbai saw a dip of nearly 40% in warehouse leasing.
• Pune experienced a sharper fall at over 50%.
• Demand from e-commerce and 3PL companies has plateaued.

🔍 What’s Causing the Decline?

1. Saturation of Existing Stock:
   Many logistics parks and industrial zones in Bhiwandi, Taloja, Chakan, and Hinjewadi are operating at near capacity, leaving little room for expansion without major upgrades.
2. Rising Land & Rental Costs:
   High land prices and increasing construction costs have made new warehousing projects less attractive for mid-size operators.
3. Macro-Economic Slowdown:
   Slower consumption, global freight volatility, and the dip in manufacturing exports have impacted logistic operations.
4. Shift to Tier-2 Cities:
   Companies are now eyeing locations like Nagpur, Indore, and Nashik for more affordable warehousing solutions.

🏗️ What This Means for Developers & Investors

While this seems like a red flag, it also opens doors for strategic repositioning.

• Redevelopment Potential: Many underutilized industrial zones can be repositioned as multi-use logistics parks or tech-enabled hubs.
• Investor Focus Shift: We’re seeing a tilt from warehouse leasing toward high-yield commercial assets and luxury residential projects.

🏢 See opportunities in commercial real estate:
👉 Explore our commercial listings in Mumbai & Pune

🔄 Future Outlook – Is This Temporary?

Experts believe this could be a short-term correction, not a long-term decline.

“This contraction reflects a natural market cycle, not a collapse. Demand will pick up once e-commerce and export numbers stabilize,” says real estate economist Mehul Shah.

✅ Ready to Invest or Know More?

👉 Contact our experts at Sheetal Properties to book your site visit or learn more about upcoming units in Adani’s Panvel project.

📞 Call Now: ‪+91-8422999725‬ CEO Sheetal Properties
📧 Email: connect@sheetalproperties.com