Delhi-NCR, Chennai drive 47 pc of warehousing leasing as volumes rise 26 pc: Report

India’s industrial and warehousing market recorded 33.3 million square feet of Grade A space absorption during January-September 2026, marking a 26% year-on-year increase, as demand from logistics and manufacturing occupiers remained strong.

Delhi-NCR and Chennai lead leasing

Delhi-NCR and Chennai together accounted for nearly 47% of total leasing during the period, while Bengaluru and Pune emerged as the fastest-growing major markets, according to a report by property consultancy Colliers India released on Thursday.

Delhi-NCR recorded absorption of 9.3 million square feet up 26% year on year, while Chennai saw leasing rise 25% to 6.4 million square feet. Bengaluru registered a 61% increase to 4.5 million square feet, and Pune recorded a 70% jump to 3.4 million square feet.

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Across the eight major markets tracked by Colliers, seven reported higher leasing volumes during the first nine months of 2026 compared with the corresponding period last year. Mumbai was the only market to register a decline, with absorption falling 14% to 3.6 million square feet.

The third quarter was particularly strong, with leasing reaching 11.4 million square feet, up 63% from 7 million square feet a year earlier. Delhi NCR accounted for 3.4 million sq ft of quarterly absorption, followed by Chennai at 2.3 million square feet and Bengaluru at 2 million square feet.

“The strong performance across key markets positions the sector to achieve 40-45 million square feet of leasing in 2026,” said Vijay Ganesh, managing director, industrial and logistics services, Colliers India.

Logistics firms account for one-third of demand

Third-party logistics (3PL) companies remained the largest occupier group, accounting for more than 11 million square feet, or roughly one-third of total leasing during January-September. Engineering companies followed with 6.6 million square feet, representing a 20% share.

Automobile companies recorded the strongest growth among occupier segments, with leasing rising 70% year on year. E-commerce, electronics and engineering occupiers also recorded annual growth of close to 30% each, indicating that demand is expanding beyond traditional logistics users.

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Large transactions continued to play a significant role in the market. Deals exceeding 200,000 sq ft accounted for around 37% of total absorption during the period. E-commerce and 3PL companies together represented approximately 58% of these large transactions, with Delhi NCR leading the segment, followed by Chennai.

Farukh Nagar and NH 48 in Delhi-NCR, along with Bhiwandi in Mumbai, remained among the most active industrial and warehousing clusters, collectively accounting for nearly one-third of year-to-date leasing.

New supply rises 19%; vacancy edges up

New Grade A industrial and warehousing supply across the eight markets reached 34.5 million square feet during January-September, up 19% from 29 million square feet a year earlier.

Delhi-NCR, Chennai and Mumbai together accounted for 55% of additions. Chennai recorded 6.3 million square feet of new supply, while Delhi-NCR added 6.6 million square feet and Mumbai 6.2 million square feet.

Pune and Ahmedabad saw supply more than double year on year, reaching 4.5 million square feet and 3.9 million square feet, respectively. Bengaluru also recorded a substantial increase, with completions rising 83% to 4.4 million square feet.

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However, supply additions outpaced cumulative absorption during the nine-month period, pushing vacancy levels marginally higher to 16% at the end of September. Average rentals remained largely stable across the eight markets, although select high-demand micro-markets continued to see increases, supported by demand for premium facilities.

The increase in both leasing and completions points to continued expansion in India’s industrial and logistics infrastructure. However, the rise in vacancy suggests that the pace and location of new supply will remain important in determining occupancy and rental performance in individual markets.

Colliers said the sector continued to demonstrate resilience despite geopolitical tensions in West Asia, supply-chain disruptions and trade realignments. The broadening base of occupiers, alongside manufacturing expansion and logistics investments, is expected to support demand across major industrial and warehousing hubs.