New Delhi: India’s warehousing and logistics sector has entered 2026 on a stronger footing following a phase of moderation in 2025, supported by improved occupier sentiment, resilient domestic demand, and continued infrastructure upgrades.
After a period of cautious expansion and network optimisation, occupiers are gradually resuming expansion plans, focusing on selective capacity additions across key logistics corridors, particularly in high-demand Grade-A assets.
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Leasing Activity Records Sequential Growth
The top seven cities recorded warehousing absorption of 11.4 Mn sq ft in Q1 2026, marking an 8% quarter-on-quarter increase and the fourth consecutive quarter of sequential growth.
On a year-on-year basis, absorption declined by 14%, largely due to a high base in the corresponding period last year. Despite this, leasing activity remained robust, led by 3PL, engineering & manufacturing, and consumer goods occupiers.
Mumbai and Pune together accounted for 81% of the total leasing activity, highlighting the continued dominance of western logistics hubs.
Commentary
Shrinivas Rao, FRICS, CEO, Vestian, said, “The warehousing and logistics sector has begun 2026 with renewed momentum, as occupiers resume expansion plans following a period of consolidation in 2025. Sequential growth in absorption reflects strong underlying market fundamentals, supported by rising manufacturing activity, infrastructure development, and resilient domestic consumption. While annual comparisons remain impacted by last year’s high base, the sector remains well positioned for sustained growth in the coming quarters.”
City-wise Performance
- Mumbai recorded 4.76 Mn sq ft, accounting for 42% of total absorption
- Pune recorded 4.46 Mn sq ft, up 162% QoQ and 42% YoY
- Hyderabad recorded 0.69 Mn sq ft, down 17% QoQ but up 50% YoY
- NCR recorded 0.73 Mn sq ft, down 61% QoQ and 57% YoY
- Chennai recorded 0.59 Mn sq ft, down 50% QoQ and 34% YoY
- Bengaluru recorded 0.17 Mn sq ft, up 566% QoQ but down 87% YoY
- Kolkata recorded 0.01 Mn sq ft
Total absorption stood at 11.41 Mn sq ft in Q1 2026, compared to 13.3 Mn sq ft in Q1 2025, reflecting a 14% annual decline.
Source: Vestian Research
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Outlook
Going forward, demand is expected to be driven by supply chain resilience, increasing adoption of Grade-A facilities, and expansion into Tier I and Tier II logistics hubs.
The sector is projected to record annual absorption exceeding 45 Mn sq ft by the end of 2026, supported by demand for efficient, technology-enabled warehousing solutions.
