South India drives surge in industrial and warehousing leasing in Q1: Colliers

India’s industrial and warehousing real estate sector has witnessed a strong start to 2026, with southern cities emerging as key growth drivers. According to a Colliers report, leasing activity across Hyderabad, Bengaluru, and Chennai surged by 58 percent year on year during the January to March quarter, reaching 4.9 million square feet compared to 3.1 million square feet in the same period last year.

This sharp growth reflects increasing demand from third party logistics providers, e commerce companies, and light manufacturing firms. These sectors continue to expand rapidly, driven by consumption growth, supply chain optimisation, and rising investments in infrastructure across the country.

Among the three cities, Bengaluru recorded a significant jump in leasing activity, more than doubling to 1.7 million square feet. Chennai also maintained steady momentum with a 15 percent increase, reaching 2.3 million square feet, reinforcing its position as a major logistics and industrial hub in South India. Hyderabad saw the most dramatic rise, with leasing activity tripling to 0.9 million square feet, supported by strong occupier demand and improving infrastructure.

At the national level, industrial and warehousing leasing across eight major cities grew by 22 percent year on year to 11 million square feet in the first quarter of 2026. While southern markets led the growth, other regions showed mixed trends. Mumbai recorded moderate growth, while Delhi NCR and Pune remained largely stable. Ahmedabad, however, saw a decline in leasing activity.

Despite the strong performance, developers are expected to take a cautious approach towards new supply additions in the near term. Ongoing geopolitical uncertainties and global supply chain disruptions may influence investment decisions and construction timelines.

Overall, the sector continues to show resilience, supported by structural demand from logistics, manufacturing, and e commerce. With Chennai and other southern cities at the forefront, industrial and warehousing real estate is set to remain a key pillar of India’s infrastructure and economic growth story.