India’s industrial and warehousing sector experienced a significant uptick in Q1 2026, with absorption reaching 18.5 million square feet, marking a robust 15.6% year-on-year growth. The surge was primarily driven by the manufacturing segment, with Pune emerging as the second-largest contributor to overall absorption.
Manufacturing accounted for 35% of the absorption, equivalent to about 6.5 million square feet, up from 30% in Q1 2025. Following closely was the third-party logistics (3PL) segment, contributing 23% to the overall absorption, while the FMCG and FMCD segment added 14%.
The report highlighted the increasing prominence of Grade-A spaces, which saw its absorption share rise to 60% from 51% in Q1 2025. This shift reflects occupiers’ growing focus on quality, compliance, and ESG standards in their choices.
Tier-I cities dominated the absorption landscape, representing 79% of the total absorption. However, Tier-II and Tier-III cities also played a significant role, contributing 21% to the overall absorption and 16% to the total supply during the quarter.
Pune stood out by contributing 4.5 million square feet, constituting 24% of the total absorption. Delhi-NCR and Mumbai followed closely with 19% and 12% shares, respectively.
India’s industrial and logistics real estate sector showcased resilience and strength, even amidst uncertainties in West Asia. With supply chains diversifying and absorption rates on the rise, the total absorption is projected to exceed 75 million square feet by 2026, as per the report’s forecast.
On the supply side, the sector witnessed the delivery of 22.1 million square feet in Q1 2026, marking a 39% year-on-year increase. Tier-I cities led the supply, contributing 18.6 million square feet (84%), while Tier-II and Tier-III cities added 3.4 million square feet, accounting for 16% of the total supply.
Delhi-NCR took the lead in supply contributions at 20% in Q1 2026, with Pune and Chennai following at 18% and 17%, respectively. Tier-II & III cities collectively contributed 16% to the total supply.
