Delhi NCR, Chennai drive 45% of warehousing demand in H1 2026: Colliers

Industrial and warehousing leasing across India's top eight cities rose 12% year-on-year to 21.9 million sq ft during the first half of 2026, with Delhi NCR and Chennai accounting for more than 45% of the overall demand, according to property consultant Colliers.

The report released on Wednesday said the sector maintained strong momentum despite a marginal slowdown in the second quarter due to supply chain disruptions arising from the ongoing conflict in West Asia. Leasing stood at nearly 11 million sq ft in Q2 2026, down just 1% sequentially, indicating continued resilience in occupier demand.

Delhi NCR emerged as the largest market with 5.9 million sq ft of Grade A space absorption during H1 2026, followed by Chennai at 4.1 million sq ft. Mumbai, Pune and Bengaluru also recorded healthy leasing activity, with each city crossing the 2 million sq ft mark.

Third-party logistics (3PL) companies remained the biggest occupiers, accounting for 30% of total leasing during the period. Engineering firms contributed 21% of demand, while e-commerce companies accounted for 16%. The electronics segment saw demand nearly double year-on-year to 1.4 million sq ft, highlighting increasing diversification in occupier profiles.

"The first half of 2026 reaffirmed the ongoing demand scale-up in India's industrial and warehousing market by recording about 22 million sq ft of Grade A space uptake, a year-on-year rise of 12%," said Vijay Ganesh, Managing Director, Industrial & Logistics Services, Colliers India.

He added that while Delhi NCR and Chennai continued to anchor leasing activity, cities such as Pune, Ahmedabad and Kolkata registered annual growth of over 30%, indicating a broader geographical spread of demand.

Large transactions of over 200,000 sq ft accounted for around 40% of total leasing during H1 2026. E-commerce companies contributed more than 30% of these large deals, followed by automobile and 3PL players with over 20% share each.

On the supply side, developers completed 24.7 million sq ft of Grade A industrial and warehousing space during the first six months of the year, up 27% from a year earlier, outpacing demand. Delhi NCR and Mumbai together accounted for more than 40% of new completions, while Bengaluru and Pune each added over 3 million sq ft, almost double their supply levels a year ago.

According to Vimal Nadar, National Director and Head of Research at Colliers India, the robust supply pipeline reflects developers' confidence in the sector's long-term prospects despite geopolitical uncertainties.

"New supply during H1 2026 stood at 25 million sq ft, a 27% year-on-year increase. 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," he said.

As supply exceeded leasing activity, overall vacancy levels rose to 17.2% at the end of H1 2026. However, average rentals continued to increase across key industrial clusters, supported by the addition of premium Grade A developments.