India’s Grade A industrial and warehousing supply is expected to reach 45-50 million square feet by the end of 2026, supported by a robust development pipeline and positive investor sentiment, according to a report by Colliers.
The report said infrastructure-led development and expanding domestic manufacturing are expected to sustain demand for industrial and warehousing space through the year.
Vimal Nadar, National Director and Head of Research at Colliers India, said developers remain confident about the sector’s long-term prospects despite global uncertainties.
He said a strong development pipeline and upbeat investor sentiment are likely to drive Grade A supply to 45-50 million square feet by the end of 2026.
According to the report, leasing activity across the top eight cities remained strong during the first half of 2026, rising 12 per cent year-on-year to nearly 22 million square feet.
Delhi-NCR and Chennai together accounted for more than 45 per cent of the total leasing demand during the period.
In the second quarter of 2026, leasing stood at around 11 million square feet, down 1 per cent from the previous quarter. The report attributed the marginal decline to supply chain disruptions caused by the ongoing conflict in West Asia, while noting that demand is expected to improve in the coming quarters if global volatility remains limited.
Third-party logistics (3PL) companies continued to be the largest occupiers, accounting for 30 per cent of total leasing during the first half of the year. Engineering firms followed with a 21 per cent share, while e-commerce companies accounted for 16 per cent. The electronics segment also recorded nearly two-fold annual growth, reflecting increasing diversification in demand.
On the supply side, new completions rose 27 per cent year-on-year to around 25 million square feet during the first half of 2026, outpacing leasing activity. Delhi-NCR and Mumbai together contributed more than 40 per cent of the new supply, resulting in the overall vacancy level rising to 17.2 per cent.
The report said continued infrastructure expansion, growth in domestic manufacturing and easing global headwinds are expected to support the industrial and warehousing sector’s growth through the remainder of 2026. (ANI)
