India warehousing leasing hits record 22 mn sq ft in H1 2026: Vestian
Synopsis
India's warehousing sector just posted its best-ever first-half leasing at 22 million sq ft — and the story isn't just volume. Western India now drives 65% of national absorption, Bhiwandi alone accounts for 69% of Mumbai's demand, and Grade-A green warehouses are becoming a dealbreaker for ESG-conscious occupiers. The sector is evolving well beyond basic storage.
Key Takeaways
India's top seven cities recorded 22 million sq ft of warehousing absorption in H1 2026 — the highest first-half leasing on record.
H1 2026 absorption rose 16 per cent year-on-year and 11 per cent over H2 2025 , per Vestian .
Mumbai and Pune accounted for 65 per cent of pan-India Q2 absorption, up from 33 per cent a year earlier.
Bhiwandi drove nearly 69 per cent of Mumbai's total warehouse absorption in Q2 2026.
3PL companies led leasing with a 41 per cent share; consumer goods and engineering followed at 12 per cent and 11 per cent .
Institutional investment in warehousing stood at $27 million in Q2 2026 — up 25 per cent quarter-on-quarter but below year-ago levels.
India's warehousing and logistics sector posted its strongest first-half performance on record, with absorption across the top seven cities reaching 22 million sq ft in H1 2026, according to a report released on Tuesday, 28 July 2026 by property consultancy Vestian. The figure marks a 16 per cent year-on-year rise and an 11 per cent jump over H2 2025, even as quarterly activity moderated 7 per cent in Q2 2026.
Key Developments in Q2 2026
The top seven cities collectively recorded 10.6 million sq ft of absorption in Q2 2026. While the quarter-on-quarter dip signals a natural cooling after a strong opening period, the cumulative H1 figure underscores what Vestian describes as the sector's resilience 'despite persistent global headwinds.'
Western India dominated the leasing landscape. Mumbai and Pune together accounted for 65 per cent of pan-India absorption in Q2 — a sharp jump from 33 per cent in the same quarter a year earlier. Mumbai emerged as the single largest contributor, with the Bhiwandi micro-market alone driving nearly 69 per cent of the city's total absorption.
Mumbai Leads; Pune Moderates
Pune held its position as the second-largest market, though its share moderated to 17 per cent from 39 per cent in Q1 2026, reflecting a natural rebalancing after exceptionally strong leasing in the previous quarter. Markets including NCR, Bengaluru, Chennai, and Kolkata also registered healthy demand, indicating broad-based occupier activity rather than a concentrated regional story.
Who Is Leasing and Why
Third-party logistics (3PL) companies led occupier demand with a 41 per cent share of Q2 absorption, followed by consumer goods and services at 12 per cent and engineering and manufacturing at 11 per cent. Together, these three segments accounted for nearly two-thirds of total absorption. Energy, automobiles and auto components, and chemicals and petrochemicals collectively contributed another 22 per cent.
Notably, Shrinivas Rao, FRICS, CEO of Vestian, pointed to a structural shift in what occupiers now prioritise. 'India's warehousing sector is undergoing a structural transformation, evolving beyond traditional priorities such as supply chain optimisation, operational efficiency, and proximity to demand centres,' he said. Sustainability has emerged as a key differentiator, with occupiers increasingly seeking Grade-A green warehouses aligned with their ESG commitments and long-term business objectives, Rao added.
Investment Activity Remains Cautious
Institutional investors stayed selective amid global uncertainty. Warehousing investments totalled $27 million in Q2 2026, representing just 1 per cent of total quarterly real estate investments in India. While this was 25 per cent higher than the previous quarter, it remained below the level recorded in the same period a year earlier — a signal that capital is watching demand fundamentals before committing at scale.
What Comes Next
The structural shift toward green, Grade-A warehousing is expected to accelerate as more corporates formalise ESG targets. The 3PL sector's dominant leasing share also points to continued outsourcing of logistics by manufacturers and retailers — a trend that has underpinned India's warehousing expansion since the GST rollout. Whether investment volumes recover in H2 2026 will depend largely on how global trade uncertainty resolves in the coming months.
Point of View
But the more consequential shift is geographic. Mumbai and Pune now command 65% of national absorption — double their share from a year ago — which suggests Western India's logistics infrastructure is pulling ahead of other corridors. That concentration is a risk: if Bhiwandi supply tightens or road connectivity bottlenecks worsen, the national numbers will feel it. The ESG pivot is real but still nascent; institutional investors committing just $27 million — 1% of quarterly real estate flows — signals that capital has not yet matched the occupier enthusiasm for green warehousing. The sector's next test is whether H2 2026 investment volumes catch up with leasing momentum, or whether global uncertainty keeps the chequebook closed.
NationPress
28 Jul 2026
Frequently Asked Questions
What is the warehousing absorption figure for H1 2026 in India?
India's top seven cities recorded 22 million sq ft of warehousing absorption in H1 2026, the highest first-half leasing figure on record, according to property consultancy Vestian. This represents a 16 per cent increase year-on-year and an 11 per cent rise over H2 2025.
Which cities led warehouse leasing in Q2 2026?
Mumbai and Pune together accounted for 65 per cent of pan-India warehousing absorption in Q2 2026, up sharply from 33 per cent in the same quarter a year earlier. Within Mumbai, the Bhiwandi micro-market drove nearly 69 per cent of the city's total leasing.
Which sectors drove warehousing demand in Q2 2026?
Third-party logistics (3PL) companies led with a 41 per cent share of Q2 absorption, followed by consumer goods and services at 12 per cent and engineering and manufacturing at 11 per cent. These three segments together accounted for nearly two-thirds of total leasing activity.
How much did institutional investors put into Indian warehousing in Q2 2026?
Institutional investment in the warehousing segment totalled $27 million in Q2 2026, equal to just 1 per cent of total quarterly real estate investments. While volumes rose 25 per cent over Q1 2026, they remained below the level recorded in Q2 2025.
Why is sustainability becoming important in Indian warehousing?
Occupiers are increasingly seeking Grade-A green warehouses that align with their ESG commitments and long-term business goals, according to Vestian CEO Shrinivas Rao. This marks a structural shift beyond traditional priorities such as supply chain optimisation and proximity to demand centres.
