India’s Industrial and Warehousing Leasing Surges 63% to 11.4 Million Sq Ft in Q3 2026

India’s industrial and warehousing sector recorded a sharp rise in leasing activity during the third quarter of 2026, supported by demand from logistics operators, engineering companies and manufacturers. Grade A leasing across eight major cities reached 11.4 million square feet, marking a 63% year-on-year increase, according to Colliers India.

The growth reflects continued demand for modern warehousing facilities as companies expand distribution networks, strengthen supply chains and invest in manufacturing operations.

Delhi NCR and Chennai Lead Leasing Demand

Delhi NCR emerged as the largest market during the July to September quarter, recording 3.4 million square feet of Grade A industrial and warehousing absorption. Chennai followed with 2.3 million square feet, while Bengaluru recorded 2 million square feet.

Pune also witnessed a significant increase in activity, with quarterly absorption rising to 0.9 million square feet from 0.2 million square feet a year earlier. Bengaluru recorded 150% annual growth, while Chennai registered a 64% increase.

For the first nine months of 2026, leasing across the eight cities totalled 33.3 million square feet, up 26% from 26.5 million square feet during the corresponding period last year. Delhi NCR accounted for 9.3 million square feet, followed by Chennai at 6.4 million square feet.

Logistics and Manufacturing Drive Occupier Demand

Third-party logistics companies remained the biggest occupier segment, accounting for more than 11 million square feet of leasing between January and September. The engineering sector contributed another 6.6 million square feet, representing around 20% of overall demand.

Automobile companies recorded 70% annual growth in Grade A space uptake. E-commerce, electronics and engineering occupiers also contributed to the expanding demand base, indicating that leasing activity is being supported by multiple industries rather than a single segment.

Large transactions exceeding 200,000 square feet accounted for approximately 37% of total leasing during the first nine months. E-commerce and third-party logistics companies together represented around 58% of these large deals.

New Supply Expands as Vacancy Edges Higher

Developers added 34.5 million square feet of Grade A industrial and warehousing space during January to September, a 19% increase year-on-year. Chennai, Delhi NCR and Mumbai together contributed 55% of the new supply.

However, supply additions outpaced cumulative demand, pushing vacancy levels marginally higher to 16% at the end of September. Average rentals remained largely stable across the eight markets, although selected high-demand locations continued to record rental increases.

Colliers India expects leasing activity to reach 40 million to 45 million square feet in 2026. If achieved, this would underline the growing importance of industrial real estate in India’s logistics and manufacturing expansion.