New Delhi, April 29: India’s warehousing and logistics sector has entered 2026 on a stronger trajectory, supported by improved occupier sentiment, resilient domestic demand, and ongoing infrastructure upgrades. Following a phase of moderation in 2025 marked by cautious expansion and network optimisation, occupiers are now gradually resuming expansion with selective capacity additions, particularly in high-demand Grade-A assets.
According to Vestian Research, the top seven cities across India recorded a total absorption of 11.4 million sq ft in Q1 2026, reflecting an 8% quarter-on-quarter growth and marking the fourth consecutive quarter of sequential increase. While absorption declined by 14% year-on-year due to a high base effect, leasing activity remained robust, led by third-party logistics (3PL), engineering & manufacturing, and consumer goods sectors.
Mumbai and Pune together accounted for 81% of the total leasing activity, reaffirming the dominance of western India’s established industrial and logistics hubs. The sustained quarterly growth signals that the slowdown in 2025 was a phase of strategic recalibration rather than a structural demand decline.
Commenting on the trend, Shrinivas Rao, FRICS, CEO, Vestian, said:
“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 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 is well positioned for sustained growth in the coming quarters.”
City-wise Highlights
- Mumbai led with 4.76 Mn sq ft, contributing 42% of total absorption.
- Pune followed with 4.46 Mn sq ft, registering 162% QoQ growth and 42% YoY growth.
- Hyderabad recorded 0.69 Mn sq ft, up 50% YoY despite a quarterly dip.
- National Capital Region saw 0.73 Mn sq ft, declining 61% QoQ and 57% YoY.
- Chennai registered 0.59 Mn sq ft, down 50% QoQ and 34% YoY.
- Bengaluru posted 0.17 Mn sq ft, reflecting a sharp QoQ surge but 87% YoY decline.
- Kolkata recorded minimal activity at 0.01 Mn sq ft.
Outlook
Looking ahead, the sector is expected to maintain strong growth momentum, driven by increasing focus on supply chain resilience, rising demand for Grade-A warehousing, and expansion into emerging Tier I and Tier II logistics hubs. Occupiers are likely to prioritise network efficiency, faster delivery timelines, and technology-enabled warehousing solutions.
Industry estimates suggest that annual absorption could exceed 45 million sq ft by the end of 2026, reflecting sustained demand and continued evolution of India’s logistics ecosystem.
