India’s warehouse leasing rises 26% as auto demand jumps 70%, institutional

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Automobile manufacturers and logistics operators are driving India’s warehouse expansion as institutional investors pursue large property portfolios.

By Amit Vijay Mohile

Updated - October 23, 2026 at 08:03 PM.

Bengaluru and Pune lead growth, but rising supply in several markets is testing occupancy, rental income and investment returns | Photo Credit: DarioEgidi

India’s Grade-A industrial and warehousing leasing increased from 26.5 million sq ft to 33.3 million sq ft during January–September 2026, an increase of 26 per cent, as automobile-sector demand surged 70 per cent and global institutional investors expanded their exposure to logistics properties.

Third-party logistics companies leased more than 11 million sq ft, approximately one-third of demand, followed by engineering companies with 6.6 million sq ft, representing 20 per cent.

Automobile occupiers recorded the fastest growth at 70 per cent, while e-commerce, electronics, and engineering registered approximately 30 per cent annual increases.

Transactions exceeding 200,000 sq ft accounted for 37 per cent of leasing, with e-commerce and logistics companies contributing 58 per cent of such deals.

“The broadening occupier base highlights the sector’s increasing diversification, reducing reliance on a single demand segment and reinforcing the market’s long-term growth prospects,” said Vimal Nadar, National Director and Head of Research, Colliers India.

Why investors are making a beeline for the sector

Brookfield announced on October 7 a ₹4,300-crore commitment to acquire and develop eight industrial and logistics parks associated with ESR India, spanning 10.5 million sq ft across five major markets.

The deal, largely involving existing properties, follows IndoSpace Core’s ₹3,000-crore acquisition of six logistics parks in late 2025, backed partly by the Canadian pension fund CPP Investments. Together, the transactions represent ₹7,300 crore in reported deal value, highlighting institutional appetite for income-generating warehousing assets.

Q3 demand accelerates.

According to Colliers India, July–September leasing increased from 7 million sq ft to 11.4 million sq ft, an increase of 63 per cent, while new supply increased from 9.6 million sq ft to 9.8 million sq ft, an increase of 2 per cent. Quarterly leasing exceeded completions by 1.6 million sq ft, contrasting with the nine-month supply surplus.

Vijay Ganesh, Managing Director, Industrial & Logistics Services, Colliers India, said Delhi NCR and Chennai accounted for half of the quarter’s leasing. At the same time, Bengaluru and Pune recorded two- to four-fold increases. He expects full-year leasing of 40–45 million sq ft.

Colliers’ figures exclude lease renewals, pre-commitments and letter-of-intent-only transactions.

Industrial corridors gain

Delhi NCR leasing rose from 7.4 million sq ft to 9.3 million sq ft, up 26 per cent, while Chennai leasing rose from 5.1 million sq ft to 6.4 million sq ft, up 25 per cent. Together, they represented 47 per cent of demand.

Farukh Nagar and NH 48 in Delhi NCR, alongside Bhiwandi in Mumbai, accounted for almost one-third of national leasing.

Pune’s leasing increased from 2 million sq ft to 3.4 million sq ft, an increase of 70 per cent, while Bengaluru increased from 2.8 million sq ft to 4.5 million sq ft, an increase of 61 per cent.

Supply test returns

New supply increased from 29 million sq ft to 34.5 million sq ft, a 19 per cent increase, exceeding nine-month leasing by 1.2 million sq ft.

Pune’s supply increased from 2.2 million sq ft to 4.5 million sq ft, a 105 per cent increase, while Ahmedabad’s increased from 1.5 million sq ft to 3.9 million sq ft, a 160 per cent increase.

Seven of eight markets recorded higher leasing. Mumbai was the exception, declining from 4.2 million sq ft to 3.6 million sq ft, a 14 per cent decrease, even as supply rose from 4.4 million sq ft to 6.2 million sq ft, a 41 per cent increase.

Published on October 23, 2026

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