Industrial real estate in India supports key sectors like manufacturing, storage, and distribution, driving economic growth. It includes warehouses, manufacturing units, flex spaces, cold storage, and data centers, all critical for logistics and e-commerce expansion.

India's logistics sector is projected to grow at an annual rate of 8.8%, reaching Rs. 42.35 lakh crore by 2029, to break into the top 25 on the World Bank Logistics Performance Index by 2030.

For developers and investors, this growth offers a significant opportunity. For instance, a logistics company in Mumbai expanding its warehouse network could reduce costs and enhance returns by selecting a location with easy access to highways and ports.

This blog explores what is industrial real estate and its types. We will also see how these properties are shaping the future of logistics and manufacturing.

TL;DR

• India’s industrial real estate market is growing, driven by sectors like e-commerce, manufacturing, and logistics.

• Warehouse, manufacturing, flex spaces, and data centres are key property types meeting the expanding demand.

• The logistics sector is expected to grow at an 8.8% annual rate, reaching Rs. 42.35 lakh crore by 2029.

• Class A, B, and C properties help investors assess market value based on age, condition, and location.

• Investing in industrial properties offers steady income but comes with challenges such as economic sensitivity and liquidity issues.

Types of Industrial Real Estate Properties

Industrial real estate in India encompasses a wide range of property types, each designed to meet the specific needs of businesses in manufacturing, logistics, and distribution. 

As the demand for these spaces grows, particularly due to the expansion of e-commerce and manufacturing, understanding the different property types is crucial for developers and investors.

1. Warehouse and Distribution Properties

Warehouse and distribution properties are integral to logistics and the supply chain. These facilities are designed for storing products and ensuring efficient distribution to retailers or consumers. 

With the booming e-commerce industry, the demand for such spaces in India has seen exponential growth.

According to reports, industrial and logistics leasing in the first half of 2025 surged by 63% year-on-year, reaching a record 27.1 million sq. ft. across the top eight cities.

Key Features and Insights:

• Space and Design: Warehouse properties typically range from 50,000 sq. ft. to several hundred thousand square feet, usually as single-storey buildings with high ceilings (up to 60 feet).

• Infrastructure: These properties are equipped with multiple loading docks and ample parking spaces to accommodate trucks and other large vehicles. Minimal office space is a standard feature.

Key Specifications:

• Loading docks for seamless loading/unloading

• Floor loads designed to support heavy items

• High ceilings for stacked storage

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2. Manufacturing Properties

India's manufacturing sector is experiencing growth, driven by initiatives such as Make in India. As demand for manufacturing spaces rises, these properties, essential for sectors like automotive, pharmaceuticals, and electronics, require large areas with high power and infrastructure, particularly in clusters like Gujarat, Maharashtra, and Tamil Nadu.

Key Features and Insights:

• Infrastructure Needs: Manufacturing spaces are equipped with heavy power systems, ventilation systems, and high-capacity electrical connections to support machinery.

• Design and Layout: These properties feature high clear heights (at least 10 feet), specialised flooring to accommodate heavy equipment, and loading docks for truck access.

• Flexibility: Manufacturing facilities range from light manufacturing (e.g., electronics or textiles) to heavy industrial properties (e.g., steel plants or cement factories).

Whether you’re a developer, investor, or business looking to expand your operations, understanding the shifting demands in logistics, manufacturing, and warehousing is crucial. 

Therefore, at BCD India, we bring decades of expertise in real estate development and project management, offering tailored solutions that align with industry trends.

3. Flex Industrial Properties

Flex industrial properties are adaptable spaces that combine office, R&D, light manufacturing, and small-scale storage, catering to startups and SMEs. 

With the rise of service-oriented businesses and tech startups, cities like Gurgaon, Hyderabad, and Pune have become key hotspots for flexible industrial real estate, meeting the growing demand for versatile spaces.

Key Features and Insights:

• Multi-Functional Spaces: Flex spaces may combine office space, small-scale manufacturing, showrooms, and warehouse space, all within the same building.

• Adaptability: The design allows for easy reconfiguration based on tenant requirements, which makes these properties highly attractive to startups and small businesses.

• Space Efficiency: These spaces are often smaller in scale but offer great flexibility for a variety of uses.

Also Read: How to Make Green Building Projects: A Step-by-Step Guide for 2025

4. Telecommunications Facilities

Telecommunications facilities are purpose-built to house telecom infrastructure, including servers, switches, and network equipment. These facilities feature specialised infrastructure, including reinforced flooring, power backup, and high-capacity HVAC systems, designed to support the heavy loads of telecom equipment.

Key Features and Insights:

• Specialised Infrastructure: Telecom facilities require high power capacities, reinforced floor slabs, and advanced HVAC systems to support continuous operations.

• Location: They are often situated near major telecommunications trunk lines, data centres, and transportation hubs to ensure high connectivity and efficiency.

• Security: Telecom facilities typically employ high-security measures to prevent service disruptions and data breaches.

5. Multi-Tenant Industrial Properties

Multi-tenant industrial properties are smaller industrial spaces shared by multiple tenants. These properties are ideal for small and medium-sized enterprises (SMEs) and can cater to businesses with diverse needs like light manufacturing, warehousing, and office space.

Key Features and Insights:

• Flexibility: Multi-tenant properties offer flexible lease options and space configurations, making them ideal for growing businesses.

• Low Overheads: Shared infrastructure means tenants benefit from reduced overhead costs while still having access to essential services.

6. Cold Storage Facilities

Cold storage facilities are crucial for storing perishable goods, such as food and pharmaceuticals, under controlled temperatures. These properties require advanced refrigeration and insulation systems to maintain optimal storage conditions.

Key Features and Insights:

• Temperature Control: Cold storage units must maintain strict temperature and humidity controls to preserve the quality of perishable goods.

• Design Features: These properties are equipped with insulated walls, refrigeration systems, and temperature-controlled loading docks to ensure safe and efficient handling of goods.

• Space Efficiency: Cold storage units are often customised for different goods, including frozen foods, pharmaceuticals, and other temperature-sensitive items.

7. Data Centres

India's data centre market, valued at INR 48,000 crore in 2024, is expected to reach INR 80,000 crore by 2030, growing at an 8.72% CAGR. 

These specialised facilities support industries such as cloud computing and telecommunications, providing high-performance computing environments for data processing and storage.

Key Features and Insights:

• Infrastructure Needs: Data centers need robust power systems, air conditioning, and fire suppression systems to support continuous operations.

• Security: These facilities have heightened physical and cyber security protocols to protect sensitive data and ensure uninterrupted service.

• Growth of Demand: With the rise of cloud computing and AI services, the demand for data centres has surged globally and within India.

Furthermore, we can classify industrial real estate into various classes as well. Let's see how this helps investors identify the right investment opportunities.

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Different Class Types in Industrial Property

Industrial properties can also be classified into three key categories based on their age, condition, and location: Class A, Class B, and Class C. These classifications help investors assess the potential of a property by considering its quality, demand, and required investment.

Class A Properties:

• High-Quality: Modern, well-maintained properties located in prime locations with easy access to transport hubs.

• Tenant Profile: Attract high-profile tenants willing to pay premium rents.

• Investment Returns: Stable, long-term returns due to high demand.

Class B Properties:

• Mid-Range: Older buildings but still in good condition. Often located in secondary markets.

• Tenant Profile: Tenants seek affordability with potential for future upgrades.

• Investment Opportunity: Can be upgraded to Class A standards with some investment, leading to higher returns.

Class C Properties:

• Older Buildings: Typically over 20 years old and may require significant upgrades.

• Tenant Profile: Suitable for smaller tenants who are price-sensitive.

• Investment Risk: Higher renovation costs, but they offer potential for substantial returns with the right strategy.

Considering both the benefits and risks of investing in industrial real estate allows developers and investors to make informed decisions that align with their objectives.

Pros and Cons of Investing in Industrial Properties in India

Investing in industrial properties in India offers steady income and growth potential, driven by sectors like e-commerce and logistics. 

However, it’s essential to consider the risks tied to market conditions and capital requirements.

Conclusion

India’s industrial real estate market has seen substantial growth. Key sectors, such as e-commerce, manufacturing, and logistics, are driving demand, particularly in cities like Delhi NCR, Bengaluru, and Mumbai. 

Understanding the diverse types of industrial properties and staying ahead of market trends is essential for developers and investors looking to capitalise on these opportunities.

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FAQs

Q: How does the growth of e-commerce impact industrial real estate demand?

A: The growth of e-commerce directly increases demand for warehouses and distribution centres, as businesses require efficient storage and fast delivery networks. This shift is driving investments in logistics hubs and last-mile delivery facilities, especially in urban areas.

Q: What are the key considerations when investing in industrial properties in tier-2 or tier-3 cities?

A: Investing in tier-2 or tier-3 cities offers lower entry costs but requires careful consideration of infrastructure, access to transport routes, and local economic growth. Many businesses are relocating to these areas for cost efficiency, but the long-term growth potential must be evaluated based on regional demand.

Q: How does the rise of automation in warehouses affect industrial real estate?

A: The rise of automation in warehouses is reshaping industrial real estate by increasing the demand for high-tech, scalable spaces. Properties designed to support robotics, AI, and automation systems are becoming more attractive, as businesses seek to enhance efficiency and reduce operating costs.

Q: What impact does India’s infrastructure development have on industrial real estate?

A: Infrastructure improvements, like new highways, ports, and logistics hubs, have a direct positive impact on industrial real estate demand. These developments make previously underdeveloped areas more accessible, opening up new opportunities for developers and investors in emerging industrial zones.

Q: How do environmental and sustainability regulations affect industrial property investments?

A: Growing environmental concerns and sustainability regulations are pushing developers to incorporate green building practices and energy-efficient technologies into industrial properties. Properties that meet these standards are becoming increasingly attractive to investors, especially as companies focus on reducing their carbon footprint.