Warehousing, Logistics Leasing Falls 7% QoQ in Q2, H1 Absorption Hits One-Year High: Vestian
New Delhi, July 28 (TNT): Leasing activity in India’s warehousing and logistics sector declined 7 per cent quarter-on-quarter to 10.6 million square feet during the second quarter of 2026, even as the sector recorded its highest first-half absorption in the past year, according to a report by real estate consultancy Vestian.
The report said the top seven cities together recorded 10.6 million sq ft of warehousing absorption in Q2, taking total leasing during the first half of 2026 to 22 million sq ft.
H1 absorption rose 16 per cent year-on-year and 11 per cent over the second half of 2025, reflecting resilient occupier demand despite global economic headwinds.
Western India continued to drive demand, with Mumbai and Pune accounting for 65 per cent of total leasing during the quarter, compared with 33 per cent a year earlier.
Mumbai emerged as the largest market with 5.04 million sq ft of absorption, supported by strong leasing activity in the Bhiwandi micro-market, while Pune recorded 1.78 million sq ft despite a sequential decline following strong activity in the previous quarter, the report stated.
Third-party logistics (3PL) companies remained the largest occupiers with a 41 per cent share of total leasing, followed by Consumer Goods and Services at 12 per cent and Engineering and Manufacturing at 11 per cent. Together, these sectors accounted for nearly two-thirds of total absorption during the quarter.
The report noted that institutional investment in the sector stood at USD 27 million during Q2 2026, accounting for one per cent of total quarterly real estate investments. While investment volumes increased 25 per cent over the previous quarter, they remained below year-ago levels.
Among other major markets, NCR recorded 1.24 million sq ft of absorption, up 70 per cent sequentially, while Chennai posted 17 per cent quarterly growth.
Bengaluru witnessed a recovery in leasing activity, whereas Hyderabad reported a 34 per cent quarter-on-quarter decline but remained largely stable compared with the same period last year. Kolkata also registered a sharp rebound in leasing activity during the quarter.
Vestian said continued government investment in infrastructure, multimodal connectivity, freight corridors, logistics parks and cold-chain facilities is expected to strengthen supply chain efficiency and support the expansion of modern warehousing.
The consultancy added that demand from 3PL, engineering and manufacturing, and consumer goods sectors is expected to remain the primary driver of leasing activity in the coming quarters.
TNT KM
