Indian Warehousing Sector Surges in 2026; Absorption Projected to Hit 45 Million Sq Ft
New Delhi, April 29, 2026: India’s warehousing and logistics sector has kicked off 2026 with significant momentum, signaling a robust recovery following a period of strategic moderation in 2025. According to the latest report from real estate consultancy Vestian, the industry is benefiting from a surge in occupier sentiment, resilient domestic demand, and ongoing infrastructure enhancements. While 2025 was characterized by cautious expansion and network optimization, the current year sees businesses returning to growth, with a specific focus on high-demand Grade-A assets across the country’s primary logistics corridors.
According to a press release from Vestian, data for the first quarter of 2026 reveals that India’s top seven cities recorded a total absorption of 11.4 million sq ft, marking an 8% increase over the previous quarter. This performance represents the fourth consecutive quarter of sequential growth, suggesting that the previous year’s slowdown was a temporary recalibration rather than a structural decline. Despite a 14% year-on-year dip compared to a high base in 2025, leasing activity remained healthy, primarily driven by the Third-Party Logistics (3PL), engineering, manufacturing, and consumer goods sectors.
The Western region continues to be the powerhouse of Indian logistics, with Mumbai and Pune together accounting for a staggering 81% of the total leasing activity. Mumbai led the charts with 4.76 million sq ft of absorption, representing 42% of the national total. Pune followed closely as the second-largest contributor, recording 4.46 million sq ft—a massive 162% quarterly surge and a 42% increase year-on-year. This revival in Pune highlights a strong comeback for the city after several quarters of relatively subdued activity.
In other regional markets, the performance remained varied. Hyderabad showed resilience with 0.69 million sq ft of absorption, a 50% increase over the same period last year, despite a slight quarterly dip. Conversely, the National Capital Region (NCR) saw a sharp decline of 57% year-on-year, recording only 0.73 million sq ft. Chennai and Bengaluru also faced annual declines of 34% and 87% respectively, while Kolkata’s leasing activity dropped to negligible levels. However, Bengaluru did show signs of a turnaround with a significant 566% increase compared to the final quarter of 2025.
Shrinivas Rao, FRICS, CEO of Vestian, expressed optimism regarding the sector’s trajectory, stating: “The warehousing and logistics sector has begun 2026 with renewed momentum, as occupiers resume expansion plans following a period of consolidation in 2025. Sequential growth in absorption reflects strong underlying market fundamentals, supported by rising manufacturing activity, infrastructure development, and resilient domestic consumption. While annual comparisons remain impacted by last year’s high base, the sector remains well positioned for sustained growth in the coming quarters.”
Industry experts anticipate that the focus for the remainder of the year will shift toward supply chain resilience and the adoption of technology-enabled warehousing solutions. As businesses prioritize faster delivery and network efficiency, demand is expected to expand into emerging Tier-I and Tier-II hubs. With these factors in play, Vestian projects that total annual absorption will exceed 45 million sq ft by the end of 2026, solidifying the sector’s standing as a cornerstone of India’s economic infrastructure.
