Warehousing supply in India’s major cities is expected to reach 516 million square feet by 2026.

According to the Logistics and Industrial State of the Nation study, cumulative Grade A and B supply in India’s Warehousing and Industrial sector will reach 516 million square feet by 2026. According to the research, India’s total leasing stock reached 344 million sq ft in H12023, with an addition of 15 million sq ft of new stock, with Delhi NCR, Mumbai, and Bengaluru being the major contributors.

H1 2023 saw 15 million sq ft of net absorption or new leases across the top eight cities. However, India’s gross absorption, which includes renewals and churnings, fell significantly to 20 million square feet from 23 million square feet in H1 2022. Notably, Mumbai, Pune, and Delhi NCR emerged as the top three demand destinations in H1 2023.

Third-party logistics companies dominated the leasing environment, accounting for 43% of demand across the top eight markets. This represents a significant increase from the 35% observed in H1 2022. In contrast, the FMCG and retail segments’ lease share fell from 23% in the same period last year to 15% in H12023. The Auto & Engineering categories accounted for 23% of the market, indicating significant momentum for light manufacturing leasing.

During the first half of 2023, there was a 6.5% year-on-year increase in industrial sector leasing, resulting in an India-wide average of INR 23 per sq ft per month for Grade A facilities. Pune, Chennai, and Bengaluru led the way in terms of average rental increase for Grade A leasing stocks.