India's top eight cities recorded nearly 22 million sq ft of industrial and warehousing leasing in H1 2026, a 12% rise over last year. Delhi NCR and Chennai drove the demand, accounting for over 45% of total Grade A space uptake. The growth reflects robust activity in e-commerce, automotive, and logistics sectors as infrastructure projects gain momentum.
The Indian industrial and warehousing market maintained strong momentum in the first half of 2026. Leasing activity across the country's eight major cities reached approximately 22 million square feet, marking a 12% increase compared to the same period in 2025. This growth highlights the ongoing expansion of supply chains and the increasing need for modern, Grade A logistics facilities to support domestic manufacturing and consumption.
Regional Leaders and Market Concentration
Delhi NCR and Chennai emerged as the primary engines for this growth, together capturing more than 45% of the total Grade A space leased during this period. These regions benefit from established logistics networks and proximity to major consumption and production centers, making them preferred choices for large-scale operations. Beyond these leaders, cities such as Mumbai, Pune, and Bengaluru each recorded leasing volumes exceeding 2 million square feet, confirming that demand remains widespread across India's industrial hubs.
Sector Demand and Large-Scale Transactions
Demand was characterized by a healthy mix of participants. Large transactions—defined as those exceeding 200,000 square feet—accounted for about 40% of the total leasing volume. The e-commerce sector was a leading participant, contributing over 30% of the total demand, while the automotive and third-party logistics sectors each accounted for more than 20%. The surge in these large-scale deals indicates that businesses are prioritizing consolidated, efficient warehousing solutions to optimize their distribution networks.
Emerging Hubs and Growth Drivers
While major metros continue to dominate, Tier-II and other industrial cities are showing rapid expansion. Pune, Ahmedabad, and Kolkata registered growth rates exceeding 30% year-on-year. This trend is driven by companies seeking lower operating costs and better access to labor in emerging industrial clusters. Government-led infrastructure initiatives, such as the PM Gati Shakti program, the National Logistics Policy, and the development of dedicated freight corridors, are expected to provide further structural support to these regions throughout the remainder of the year.
Monitorables for Investors
Despite the positive trend, investors should remain aware of potential challenges. Although overall demand is healthy, market expansion may face pressure from supply chain volatility, as seen in the marginal 1% dip in leasing during the second quarter. Furthermore, future performance will depend on the continued execution of infrastructure projects and the ability of developers to maintain rental yields while managing the costs of developing high-quality space. Investors should monitor occupancy levels and lease renewal patterns in key Grade A parks to gauge the long-term sustainability of the current growth cycle.