India’s Industrial and Warehousing Real Estate Poised for Sustained Growth in 2026

India’s industrial and warehousing real estate sector is set to build on its strong performance as it moves into 2026, backed by expanding manufacturing activity, policy support, and rising interest from both occupiers and investors. Industry experts estimate average annual demand of 30 to 40 million square feet next year, reflecting India’s strengthening position as a regional manufacturing and logistics hub.

Data released by Colliers India shows that the sector recorded 26.5 million square feet of leasing during the first nine months of 2025, an 11 percent increase compared to the same period last year. This growth was achieved despite global trade uncertainties and cautious investment sentiment among multinational corporations, highlighting the resilience of domestic demand.

Manufacturing focused government policies, steady infrastructure development, and evolving distribution models are reshaping occupier requirements. Companies are increasingly prioritising large, modern facilities that enable faster turnaround times and operational efficiency. Outsourcing of logistics functions is also gaining pace, as manufacturers and retailers look to streamline supply chains and improve flexibility.

Leasing activity remains concentrated in established markets. Delhi NCR, Bengaluru, and Hyderabad together accounted for nearly 60 percent of total industrial and logistics absorption during 2025. These cities continue to attract occupiers due to strong infrastructure, access to consumption centres, and mature industrial ecosystems.

Looking ahead, the market is expected to witness a rise in large scale transactions exceeding 100,000 square feet. Such deals accounted for 38 percent of total absorption in the first nine months of 2025, up sharply from 27 percent a year earlier, indicating a clear trend towards consolidation and long term expansion.

Industry leaders note that occupiers are becoming more selective. As highlighted by Anshuman Singh of IndoSpace, demand is increasingly consolidating around developers capable of delivering scalable infrastructure with embedded ESG standards, where sustainability, governance, and safety are baseline expectations.

On the investment side, a study by JLL noted that industrial and logistics assets accounted for only 8 percent of the USD 10.4 billion institutional capital deployed in Indian real estate in 2025, signalling significant room for future growth. Overall, the sector is poised for steady, quality driven expansion in 2026.