India’s warehousing and industrial real estate market recorded a 16.2% year-on-year increase in net absorption to 49.5 million sq ft during the first nine months of 2026, compared with 42.6 million sq ft in the corresponding period last year, reflecting sustained demand for industrial and logistics space.
According to a report by ANAROCK Research & Advisory, cumulative net absorption across the top eight cities reached 266.5 million sq ft between 2021 and September 2026, underlining the expansion of India’s warehousing sector over the past five years.
However, the growth remains concentrated in a handful of markets, with the National Capital Region (NCR), Mumbai Metropolitan Region (MMR) and Pune together accounting for nearly 58% of cumulative absorption.
Pune overtakes Bengaluru in cumulative absorption
NCR retained its position as India’s largest warehousing market, accounting for 21.8% of cumulative absorption between 2021 and Q3 2026. MMR followed with an 18.5% share, while Pune emerged as the third-largest market with 17.4%, overtaking Bengaluru, which accounted for 15.1%.
Chennai contributed 10.7% of cumulative absorption, followed by Kolkata at 7.7%. Hyderabad and Ahmedabad accounted for 4.4% each.
ANAROCK Group Managing Director – Commercial Leasing & Advisory, Peush Jain said NCR, MMR and Pune together accounted for nearly 58% of cumulative absorption across the eight cities, highlighting the concentration of warehousing growth in select markets.
NCR records sharpest rental appreciation
Warehousing rentals have also witnessed significant appreciation, with the national average monthly rent across the eight cities reaching ₹28.1 per sq ft in Q3 2026, representing a 27% increase since 2021.
NCR recorded the steepest rental increase, with average monthly rents rising 49% from ₹22.2 per sq ft in 2021 to ₹33 per sq ft in Q3 2026.
The increase has accelerated in recent years. NCR rents rose just 3% between 2021 and 2023 but surged 44% between 2023 and Q3 2026.
MMR continued to command the highest average warehousing rent at ₹43.9 per sq ft per month, more than twice the ₹19 per sq ft recorded in Ahmedabad, the cheapest among the eight markets.
Hyderabad, MMR and Bengaluru recorded rental increases of 30% or more since 2021. In comparison, Pune, Chennai and Ahmedabad witnessed relatively moderate increases of 17%, 19% and 20%, respectively.
Pune has the lowest vacancy rate
The national warehousing vacancy rate stood at 7.9% as of Q3 2026, although considerable differences were visible across markets.
Pune emerged as the tightest market, with vacancy at 6.8%, followed by Chennai and Kolkata at 7.1% each. NCR recorded 7.3%, while MMR stood at 7.6%.
Bengaluru reported the highest vacancy at 11.5%, followed by Ahmedabad at 11% and Hyderabad at 9.2%.
Interestingly, Bengaluru’s vacancy rate remained relatively high despite a 30% increase in rents since 2021. Pune, which had the lowest vacancy, recorded the slowest rental appreciation among the eight cities.
According to Jain, factors beyond vacancy, including the quality and location of available stock, occupier requirements and the nature of industrial activity in each market, also influence rental performance.
Logistics and manufacturing drive demand
Third-party logistics (3PL) emerged as the largest demand driver nationally, accounting for 26% of warehousing demand. Manufacturing contributed 22%, while the automotive sector accounted for 10%.
The combined 48% share of 3PL and manufacturing highlights the importance of logistics networks and industrial activity in driving demand for warehousing space.
City-level demand patterns, however, reflect distinct industrial specialisations.
MMR remained strongly logistics-oriented, with 3PL accounting for 40% of its warehousing demand. Kolkata also had a significant logistics component, with 3PL contributing 36%.
Pune’s demand was led by manufacturing and automotive activities, accounting for 32% and 22%, respectively. The city alone contributed 37% of automotive-sector warehousing absorption across the eight cities between 2021 and Q3 2026.
Chennai’s industrial ecosystem was reflected in electronics accounting for 14% of its warehousing demand, the highest share in this segment among the eight markets. Manufacturing contributed 28%, while 3PL accounted for 26%.
Hyderabad was predominantly manufacturing-led, with the segment contributing 31% of demand, while 3PL accounted for just 13%, the lowest among the markets analysed.
NCR had a more diversified demand profile, led by 3PL at 26%, manufacturing at 17% and retail at 13%. In Ahmedabad, 3PL, manufacturing and automotive occupiers contributed 28%, 22% and 21%, respectively.
Market growth to depend on city-level fundamentals
ANAROCK said the next phase of expansion in India’s warehousing and industrial real estate market would depend on city-level industrial specialisation, logistics requirements, availability of suitable warehousing stock and the balance between new supply and occupier demand.
While NCR has emerged as the standout market for rental appreciation, Pune combines a significant share of national absorption with the lowest vacancy rate. MMR continues to command a substantial rental premium, while Bengaluru’s higher vacancy points to greater availability of space despite rental growth.
Jain said the differences across markets could influence location and cost decisions for occupiers, while developers and investors would need to assess individual market fundamentals rather than rely solely on national demand growth.
The report underscores that the strength of occupier demand, the composition of industrial activity and the availability of suitable space will be as important as headline absorption growth in determining the sector’s next expansionary phase.