India’s top seven cities saw a significant increase in warehousing and logistics absorption, reaching 11.4 million square feet in the first quarter of 2026. This marks an 8% quarter-on-quarter rise and the fourth consecutive quarter of growth, as per a report by Vestian. The sector’s positive performance was attributed to factors such as enhanced occupier sentiment, strong domestic demand, and ongoing infrastructure enhancements.
The CEO of Vestian, Shrinivas Rao, highlighted that the growth in absorption reflects robust market fundamentals driven by increased manufacturing activities, infrastructure development, and resilient domestic consumption. Although there was a 14% year-on-year decline in absorption, leasing activities remained strong, particularly led by third-party logistics, engineering, manufacturing, and consumer goods occupiers.
The report forecasts that the warehousing and logistics sector is poised to surpass an annual absorption of 45 million square feet by the end of 2026, showcasing sustained demand. Mumbai and Pune played a significant role, contributing 81% of the total leasing activity. This underscores the continued dominance of established western industrial and logistics hubs in driving demand.
Mumbai led the absorption figures with 4.76 million square feet, representing 42% of the total absorption in India. Pune followed closely with 4.46 million square feet, marking a substantial increase of 162% quarter-on-quarter and 42% year-on-year. Other cities like Hyderabad, the National Capital Region, Chennai, Bengaluru, and Kolkata also recorded varying absorption figures, indicating a diverse market landscape.
The sector’s future growth is expected to be fueled by a focus on supply chain resilience, the rising demand for modern Grade-A facilities, and expansion into emerging Tier-I and Tier-II logistics hubs. The emphasis on network efficiency, rapid delivery capabilities, and technology-driven warehousing solutions is likely to drive fresh demand along strategic corridors, according to the report.
