India Warehousing Leasing Rises 12% to 19.1 Million Sq Ft in Q3 2026, Manufacturing and 3PL Drive Demand

India’s industrial and warehousing market regained momentum in the third quarter of 2026, with leasing activity increasing 12% year-on-year to 19.1 million square feet across the country’s eight major markets. Strong demand from manufacturing companies and third-party logistics (3PL) operators supported the recovery, according to Knight Frank India’s latest warehousing market report.

Manufacturing and 3PL occupiers together accounted for 76% of quarterly leasing, highlighting the growing role of industrial production and outsourced supply-chain operations in shaping India’s warehouse demand. The increase also reflects businesses preparing inventory ahead of the festive season, despite geopolitical uncertainty and higher fuel and freight costs.

For the January-September 2026 period, total warehousing leasing across the eight markets reached 55.9 million square feet, registering 14% annual growth. Mumbai led with 15.5 million square feet, followed by Delhi-NCR at 10.1 million square feet. Bengaluru and Pune each recorded 6.2 million square feet, while Ahmedabad reached 5.9 million square feet.

Chennai recorded 5.7 million square feet during the first nine months, although its year-to-date leasing was down 11% from the previous year. However, the city’s manufacturing segment showed a stronger performance in the third quarter. Manufacturing-related leasing in Chennai increased 18% year-on-year to 2.7 million square feet, accounting for 22% of national manufacturing leasing during the quarter.

The report also points to a wider geographical spread of manufacturing-led warehouse demand. Mumbai, Bengaluru, Hyderabad and Kolkata collectively added 4.4 million square feet of manufacturing leasing, while manufacturing activity in Hyderabad and Kolkata recorded substantial year-to-date growth.

The quality of available warehouse space is becoming another important consideration for occupiers. Grade A facilities accounted for 66% of total leasing in Q3 2026, compared with 56% in the corresponding quarter last year. Across the eight markets, modern industrial and warehousing stock reached 597.7 million square feet.

Rental values also moved upwards, with all eight markets recording annual growth of between 3% and 5%. Mumbai and Bengaluru registered 5% growth, while Hyderabad recorded the lowest increase at 3%.

The latest figures indicate that India’s warehousing sector is moving beyond conventional storage requirements. Manufacturing expansion, specialised logistics operations and demand for modern facilities are reshaping the market. With leasing activity spreading across established and emerging industrial locations, access to suitable land, infrastructure and quality Grade A supply will remain important to sustaining growth.