India’s warehousing demand touches three-year high of 32.6 mn sq ft; manufacturing, auto sectors drive growth
New Delhi, Nov 3 (TNT): India’s warehousing and logistics sector recorded a cumulative absorption of 32.6 million sq ft during the first nine months of 2026, the highest in three years, driven by growing demand from manufacturing, automobile and logistics companies, according to a report released by real estate consultancy Vestian on Tuesday.
The sector recorded an absorption of 10.58 million sq ft in the July-September quarter (Q3 2026), registering a marginal 0.2 per cent growth over the previous quarter and a 15 per cent increase year-on-year, despite geopolitical uncertainties and macroeconomic pressures, the report revealed.
Third-party logistics (3PL) continued to lead leasing activity with a 29 per cent share of total absorption, followed by engineering and manufacturing at 23 per cent and automobiles and auto components at 14 per cent.
Together, the three segments accounted for 66 per cent of the total demand.
The automobile and auto components sector recorded its highest-ever quarterly absorption of 1.5 million sq ft in seven years, while its share in overall leasing activity also reached a seven-year high, the report said.
City-wise, Chennai led warehousing absorption with 2.89 million sq ft, followed by Mumbai at 2.70 million sq ft and Pune at 2.20 million sq ft.
NCR recorded 1.27 million sq ft, while Bengaluru and Hyderabad accounted for 0.71 million sq ft and 0.68 million sq ft, respectively, the report stated.
Hyderabad registered a 48 per cent quarterly and 44 per cent annual growth in absorption, while Bengaluru recorded a 445 per cent year-on-year increase.
The sector also attracted institutional investments worth USD 332 million during Q3 2026, accounting for 17 per cent of total quarterly investments and marking the highest share in two years.
Vestian CEO Shrinivas Rao said the sector was evolving beyond traditional demand drivers, with increased participation from manufacturing, automotive and other industrial segments complementing the established 3PL sector.
Sustained occupier demand, infrastructure development and policy support were strengthening the sector’s long-term potential, while India’s expanding consumption base and manufacturing ecosystem were creating opportunities for modern and efficient warehousing, he said.
The report noted that continued infrastructure development and policy support were expected to accelerate demand for technology-enabled warehousing across established and emerging logistics hubs, encouraging greater institutional participation and investments.
TNT KM
