Delhi NCR And Chennai Drive Over 45 Percent Of Industrial And Warehousing Demand In First Half Of 2026 As 3PL Firms Lead Leasing: Colliers India
New Delhi, July 16, 2026: India’s industrial and warehousing sector sustained its strong momentum in the first half of 2026, with gross absorption across the top eight cities reaching nearly 22 million square feet. According to the latest market report by real estate advisory firm Colliers, this represents a 12% year-on-year growth. Delhi NCR and Chennai emerged as the primary growth engines, together accounting for more than 45% of the overall leasing activity. Other major logistics hubs, including Mumbai, Pune, and Bengaluru, also recorded healthy transaction volumes, with each city surpassing 2 million square feet of Grade A space uptake, Colliers India said in a press release.
While the half-yearly performance was robust, the second quarter of 2026 witnessed a marginal 1% drop in demand compared to the first quarter, logging around 11 million square feet of leasing. This slight softening was attributed to global supply chain disruptions arising from the ongoing conflict in West Asia. However, industry experts anticipate that a renewed focus on bolstering domestic manufacturing capabilities could drive an upswing in demand in the coming quarters, provided that the impact of global volatility remains contained.
Third-party logistics (3PL) operators continued to anchor the market, driving 30% of the total leasing activity during the first half of the year. Demand from the engineering and e-commerce segments also remained strong, capturing 21% and 16% of the leasing share, respectively. Notably, the electronics segment experienced a significant surge, doubling its annual uptake to reach 1.4 million square feet. Space absorption remained highly concentrated within prime logistics clusters, with Bhiwandi in Mumbai, along with Farukh Nagar and the NH-48 corridor in Delhi NCR, accounting for over one-third of the total national demand.
Discussing the sector’s performance, Vijay Ganesh, Managing Director, Industrial & Logistics Services, Colliers India, said: “The first half of 2026 reaffirmed the ongoing demand scale-up in India’s industrial & warehousing market by recording ~22 million sq ft of Grade A space uptake, a YoY rise of 12%. The annual growth is particularly significant, given the challenging second quarter amid evolving global supply chains. Quarterly demand remained firm in Q2 at nearly 11 million sq ft, albeit witnessing a marginal 1% dip compared to the previous quarter. While Delhi NCR & Chennai continued to anchor leasing during H1 2026, cities such as Pune, Ahmedabad & Kolkata witnessed growth of 30% and upwards, signaling the emergence of a more diversified demand landscape. Going forward, infrastructure-led development and expanding domestic manufacturing, coupled with moderating global headwinds, are expected to reinforce the growth trajectory of industrial & warehousing sector through 2026.”
Large-sized deals of over 200,000 square feet constituted roughly 40% of the total absorption across the top eight cities. E-commerce occupiers led this segment, accounting for more than 30% of these large-format transactions, followed closely by the automotive and 3PL sectors, which each represented over 20% of big-ticket leasing. Major transactions during the second quarter of 2026 included Amazon securing a massive 527,900-square-foot facility at the Antonov Industrial & Logistics Park in Bhiwandi, Mumbai, and Envision Energy leasing a 500,000-square-foot space at the Shree Shakti Integrated Logistics Park in Ahmedabad’s Changodar-Bagodara cluster.
On the supply side, new completions outpaced demand in the first half of 2026, reaching approximately 25 million square feet across the top eight cities. This represents a 27% year-on-year increase, reflecting high developer confidence and a concerted effort to deliver premium, technology-enabled logistics spaces. Delhi NCR and Mumbai collectively accounted for over 40% of these completions, while Bengaluru and Pune both saw supply volumes double compared to the first half of 2025. This surge in new completions caused overall vacancy levels to tick up to 17.2% by the end of June 2026, though average rentals continued to witness a notable upward trend across key micro-markets due to the influx of high-spec Grade A developments.
Reflecting on the supply-demand dynamics and developer sentiment, Vimal Nadar, National Director & Head of Research, Colliers India, said: “Amid ongoing conflict in Western Asia and constantly evolving global trade realities, India’s industrial & warehousing market demonstrated remarkable resilience in H1 2026. The sustained dominance of 3PL occupiers, coupled with growing participation from Engineering and E-commerce firms, underscores the vitality of India’s domestic manufacturing capabilities and consumption driven economy. Buoyed by these fundamental strengths, developers remained confident about the long-term growth prospects of India’s industrial & warehousing market. In fact, new supply during H1 2026 stood at 25 million sq ft, a 27% YoY increase. Looking ahead, a strong development pipeline and upbeat investor sentiment are expected to drive Grade A supply to 45-50 million sq ft by the end of 2026.”
