IN Brief:
- Delhi-NCR, Chennai, and Bengaluru generated roughly 60% of Indian industrial and logistics leasing during H1 2026.
- Third-party logistics accounted for 31% of absorption, while engineering and manufacturing occupiers represented 26%.
- Institutionally backed projects supplied 33% of new warehousing space during the half year.
India’s industrial and logistics leasing market remained concentrated in its largest distribution hubs during the first half of 2026, with Delhi-NCR, Chennai, and Bengaluru accounting for about 60% of activity. CBRE’s latest market snapshot also shows third-party logistics and engineering and manufacturing occupiers continuing to dominate demand, while institutional capital remains a significant part of new warehouse development.
Third-party logistics accounted for 31% of absorption between January and June, with engineering and manufacturing companies taking 26%. More than half of leasing demand therefore came from occupiers directly tied to contract logistics and industrial production before e-commerce and other customer groups are counted.
The mix has shifted from the second half of 2025, when CBRE recorded more than 30 million sq ft of warehousing absorption and 3PL operators accounted for about 44% of take-up. Engineering and manufacturing represented 20% in that period, while e-commerce accounted for 13%. The latest first-half percentages point to a more balanced split between logistics providers and industrial occupiers, although the public H1 2026 snapshot does not disclose a directly comparable total leasing figure.
The comparison with the first half of 2025 also shows manufacturing taking a larger share. India recorded 27.1 million sq ft of logistics leasing during that period, with 3PL at roughly 32% and engineering and manufacturing at 19%. The rise to 26% for industrial occupiers in H1 2026 suggests that modern warehouse demand is being supported by production-linked requirements as well as outsourced distribution.
Location remains tightly concentrated. Delhi-NCR, Chennai, and Bengaluru generated around 60% of first-half leasing, underlining the continued pull of established industrial and consumption corridors. Large occupiers benefit from markets where transport links, labour pools, customers, suppliers, and existing logistics services can support larger facilities and more complex operations.
Institutional participation is also visible on the supply side. CBRE says 33% of new warehousing supply during H1 2026 was institutionally backed. That share indicates continued investment appetite for modern logistics assets, with capital flowing into a market where occupiers increasingly expect standardised building specifications, larger floorplates, and facilities capable of supporting automation or specialised industrial handling.
Recent leasing in Bengaluru illustrates the scale of individual commitments. DHL Supply Chain India has taken 240,000 sq ft at Hoskote on the eastern side of the city under a five-year agreement, adding a substantial contract logistics operation in one of the three markets leading national activity. The deal includes a mobilisation period before full rental payments begin, giving the operator time to prepare the building for customer operations.
Developer pipelines are expanding alongside occupier demand. Welspun One said in June that it planned more than 10 million sq ft of industrial and logistics leasing over three years after completing leases and letters of intent covering more than 2.5 million sq ft in its previous financial year. Its portfolio spans port-led facilities, urban distribution, manufacturing, e-commerce, and healthcare-linked infrastructure.
For 3PL operators, concentration in the largest hubs brings scale advantages alongside higher occupancy pressure. Dense markets support multi-customer facilities, carrier networks, labour availability, and automation investment, but competition for suitable buildings and land can raise costs. A larger warehouse therefore has to carry enough contracted throughput to justify both the property commitment and the systems installed inside it.
Manufacturing occupiers can also change building specifications. Production-linked logistics may require heavier floor loading, specialist storage, inbound parts handling, sequencing, quality-control areas, or different yard patterns from a conventional retail distribution centre. As engineering and manufacturing take a greater share of leasing, developers have a stronger incentive to build space that can accommodate industrial logistics rather than a single standard warehouse format.
The institutional share of new supply adds another constraint: professionally funded projects still need occupier demand to arrive at the right location and specification. Capital can accelerate construction, but oversupply remains possible if development runs ahead of leasing or if new buildings are poorly matched with operational requirements. The concentration of demand in three major markets suggests occupiers are still selective about where they commit.
India’s warehouse market is therefore expanding through a combination of outsourced logistics demand, manufacturing activity, and institutional development rather than one dominant e-commerce cycle. The next indicator will be whether the larger industrial share persists through the second half and whether new supply continues to be absorbed without weakening utilisation or rental discipline in the leading hubs.
