India warehouse leasing hits 36.8M sq ft in H1 2026, up 15% YoY

For proptech and commercial real estate operators, India's H1 2026 warehousing surge is not just a leasing headline—it is a technology adoption signal. With Grade A facilities now 47% of a 584.9 million sq ft stock and vacancy tightening to 11.4%, occupiers and developers are competing on efficiency, automation and data. That creates demand for smart building systems, robotics-ready warehouses and AI-driven site selection tools.

India's industrial and warehousing market delivered a robust first half of 2026, with leasing activity across the country's eight primary markets reaching 36.8 million square feet, a 15 per cent year-on-year increase, according to Knight Frank India's report published on 20 August 2026. That result came despite persistent geopolitical disruptions, elevated freight costs and currency volatility, underscoring the resilience of domestic consumption, manufacturing expansion and logistics infrastructure investment. The report frames the second half of 2026 as a continuation of this trajectory, with policy support, greater outsourcing of logistics and improving multimodal connectivity expected to sustain momentum. The completion of the Dedicated Freight Corridor network and India's increasing appeal as an alternative global manufacturing base are identified as longer-term catalysts for occupier demand.

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With Grade A facilities now 47% of a 584.9 million sq ft stock and vacancy tightening to 11.4%, occupiers and developers are competing on efficiency, automation and data.

The composition of demand reveals a structural shift taking place in India's logistics real estate. Manufacturing remained the largest single driver, accounting for 46 per cent of total leasing at 17 million square feet, up 17 per cent from a year earlier. This aligns with India's push to position itself as a credible alternative to China for global supply chains, supported by production-linked incentive schemes and improvements in infrastructure. Third-party logistics operators strengthened their position as the second-largest occupier segment, taking 30 per cent of leasing at 11.1 million square feet, a 27 per cent year-on-year increase. The rapid growth in 3PL leasing is especially significant because it signals that shippers and retailers are increasingly outsourcing distribution to specialist providers, which tend to require larger, more sophisticated, technology-enabled facilities. Together, manufacturing and 3PL accounted for more than three-quarters of all leasing in the first half, making them the twin engines of the market.

City-level performance shows both the concentration and the spreading of warehouse demand. Mumbai led all markets with 10.7 million square feet of transactions, its highest-ever half-yearly leasing volume, representing 44 per cent year-on-year growth. The National Capital Region followed with 5.9 million square feet, up 17 per cent, while Bengaluru recorded 4 million square feet, a 36 per cent increase. Ahmedabad grew 15 per cent, and Kolkata registered the fastest percentage growth at 69 per cent. This geographic distribution matters for developers and investors because it indicates that while gateway cities remain dominant, secondary markets are becoming meaningful contributors to leasing volumes. Kolkata's outsized growth, in particular, points to improving connectivity and lower-cost land drawing occupiers beyond the traditional hubs.