Industrial & Warehousing Sector Absorption Up 15.6% Y-o-Y at 18.5 Million Sq Ft in Q1 2026: Savills India

Gurugram April 1, 2026: India’s industrial and logistics real estate sector grew steadily, startingthe year on a positive note, with absorption reaching 18.5 million sq. ft. in Q1 2026, an 15.6% Y-o-Y increase from 16 million sq. ft. in Q1 2025, according to Savills India, a leading global realestate advisory firm. Tier-I cities accounted for 79% of this absorption, while Tier-II and Tier-IIIcities contributed 21%.

On the supply front, the sector delivered 22.1 million sq. ft. in Q1 2026, with 39.0% Y-o-Ygrowth. Tier-I cities contributed a substantial 18.6 million sq. ft. (84%) and Tier-II and Tier-IIIcities added 3.4 million sq. ft. (16%). This robust delivery across cities reflects the market’salignment with growing demand.

Shift Towards Grade-A Spaces
The demand for Grade-A space has surged in recent years, due to the growing emphasis on
quality and compliance, as well as changing occupier preferences to meet ESG standards. As a result, the overall Grade-A absorption increased to 60% in Q1 2026 from 51% in Q1 2025.

Manufacturing segment has continued to be the strongest demand driver, accounting for 6.5 mn sq. ft. (35%) of total absorption in Q1 2026, up from 30% in Q1 2025. This is followed by
sustained demand from 3PL segment with a 23% overall contribution, while the FMCG and
FMCD segment contributed 14%. The E-Commerce segment is gaining traction, with contribution to overall absorption at 11%, followed by the retail segment at 4%.

Pune emerged as the second‑largest contributor to overall absorption (24%), primarily driven by its growing manufacturing footprint followed by Delhi-NCR and Mumbai with 19% and 12%
respectively. The Tier-II & III cities together accounted for 21% of the total absorption. In terms
of supply, Delhi-NCR accounted for the highest contribution of 20% in Q1 2026, followed by
Pune at 18% and Chennai at 17%, while the Tier-II & III cities together accounted for 16% of the total supply.

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