India’s warehousing market grows 16 pc in nine months; NCR rent rises 44 pc since 2023
Growth witnessed across eight major cities underscores sustained demand for industrial and logistics infrastructure, although the benefits remain unevenly distributed across markets
India’s industrial and warehousing real estate market continued its expansion in 2026, with net absorption across eight major cities rising 16.2 per cent year-on-year to 49.5 million square feet in the first nine months, compared with 42.6 million square feet during the corresponding period last year, according to research by ANAROCK Research & Advisory.
The growth underscores sustained demand for industrial and logistics infrastructure, although the benefits remain unevenly distributed across markets. Between 2021 and the third quarter of 2026, cumulative net absorption across the eight cities reached approximately 266.5 million square feet, reflecting the scale of occupier demand over the five-year period.
NCR, MMR, Pune biggest markets
The National Capital Region (NCR) emerged as the largest contributor, accounting for 21.8 per cent of cumulative absorption, followed by the Mumbai Metropolitan Region (MMR) at 18.5 per cent and Pune at 17.4 per cent. Pune has overtaken Bengaluru, which accounted for 15.1 per cent to become the country's third-largest warehousing market by cumulative absorption.
Together, NCR, MMR and Pune represented nearly 58 per cent of total warehousing absorption across the eight markets, highlighting the concentration of industrial real estate activity in a handful of established logistics and manufacturing destinations.
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“These are encouraging numbers, but the fact is that India's warehousing growth remains concentrated in just a few markets. Also, rental appreciation and vacancy levels vary markedly across cities,” said Peush Jain, managing director – Commercial Leasing & Advisory at ANAROCK Group.
NCR leads rental appreciation
Rental growth has emerged as another defining feature of the market, with NCR recording the sharpest appreciation among the eight cities.
Average monthly warehousing rents in NCR increased 49 per cent between 2021 and the third quarter of 2026, rising from Rs 22.2 to Rs 33 per square foot. The increase has accelerated in recent years, with rents climbing approximately 44 per cent since 2023, indicating strengthening occupier demand and increasing pricing power in the region.
The national average monthly rent stood at Rs 28.1 per square foot in the third quarter, representing a 27 per cent increase since 2021.
Despite NCR's stronger rental growth, MMR continued to command the highest average rent at Rs 43.9 per square foot per month, more than twice Ahmedabad's Rs 19, the lowest among the eight markets.
Hyderabad, MMR and Bengaluru recorded rental increases of 31 per cent, 31 per cent and 30 per cent, respectively, since 2021. Kolkata registered 22 per cent growth, while Ahmedabad, Chennai and Pune recorded comparatively moderate appreciation of 20 per cent, 19 per cent and 17 per cent.
Contrasting market dynamics
The national warehousing vacancy rate stood at 7.9 per cent in September 2026, suggesting that demand growth has been accompanied by varying levels of available supply.
Pune emerged as the tightest market, with vacancy at 6.8 per cent, followed by Chennai and Kolkata at 7.1 per cent each. NCR recorded 7.3 per cent, while MMR stood at 7.6 per cent.
At the other end of the spectrum, Bengaluru reported the highest vacancy at 11.5 per cent, followed by Ahmedabad at 11 per cent and Hyderabad at 9.2 per cent.
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The divergence highlights the complexity of interpreting rental and vacancy trends independently. Bengaluru, despite recording 30 per cent rental appreciation since 2021, continues to have relatively higher available space. Pune, meanwhile, combines the lowest vacancy with a substantial share of national absorption, although its rental growth has remained comparatively modest.
Logistics, manufacturing drive demand
Third-party logistics (3PL) operators accounted for 26 per cent of national warehousing demand, followed by manufacturing at 22 per cent and the automotive sector at 10 per cent. Together, logistics and manufacturing contributed nearly half of total demand.
However, city-level occupier profiles reveal distinct industrial specialisations.
MMR remains strongly logistics-oriented, with 3PL accounting for 40 per cent of its warehousing demand. Pune's demand is driven by manufacturing and automotive activity, contributing 32 per cent and 22 per cent, respectively. The city also accounted for 37 per cent of automotive-sector warehousing absorption across the eight markets between 2021 and the third quarter of 2026.
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Chennai's industrial ecosystem is reflected in electronics, which represents 14 per cent of its warehousing demand, the highest share among the eight cities. Hyderabad is more manufacturing-led, with the segment contributing 31 per cent of demand, while Kolkata's 3PL segment accounts for 36 per cent.
NCR has a relatively diversified demand profile, led by logistics at 26 per cent, manufacturing at 17 per cent and retail at 13 per cent.
Location-specific market growth
The findings suggest India's warehousing expansion is entering a more differentiated phase, where occupier requirements, industrial clusters, infrastructure connectivity and the availability of suitable stock will increasingly determine market performance.
"Going forward, city-level industrial specialisation, logistics requirements, the availability of suitable warehousing stock and the balance between new supply and occupier demand will determine this market's performance," Jain said.
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For developers and investors, the widening differences in rental appreciation, vacancy and sectoral demand point to the importance of evaluating individual markets rather than relying solely on national growth trends.
As India's logistics and manufacturing ecosystem expands, the next phase of warehousing demand is likely to be shaped not merely by the volume of space absorbed, but by where occupiers need it, the quality of available infrastructure and the economics of operating from individual locations.
