Industrial & Warehousing Leasing Hits 11 Mn Sq Ft in Q1 2026, Up 22% YoY: Colliers India
Delhi NCR led the market with a 28% share of total leasing, followed by Chennai at 21%. Leasing activity in Hyderabad and Bengaluru also saw strong momentum, with Grade A space absorption growing 2–3 times compared to the same period last year.
At the micro-market level, Hoskote–Narsapura in Bengaluru emerged as the most active location with 1.4 million sq ft of leasing, followed by Bhiwandi with around 1.1 million sq ft.
Third-party logistics (3PL) players drove demand, accounting for nearly one-third of total leasing activity, with demand rising 1.8 times compared to Q1 2025. The growth was supported by expanding logistics needs and supply chain modernisation, while e-commerce and automobile sectors also contributed significantly to overall leasing demand.
“Leasing activity in the first quarter of 2026 remained strong at 11 million sq ft, marking a 22% annual increase and underscores sustained demand for Grade A space. Demand from 3PL, E‑commerce and Automobile players remained firm during Q1 2026, as occupier diversification continued to gain momentum. Although long‑term fundamentals of India’s industrial & warehousing market remain intact, developers are likely to adopt a measured approach with respect to supply additions in the near term amid prevailing geopolitical crisis and supply chain disruptions. Nevertheless, continued policy support to enhance domestic manufacturing and logistics capabilities will remain pivotal in navigating potential downside risks.” says Vijay Ganesh, Managing Director, Industrial & Logistics Services, Colliers India.
Space uptake by 3PL players remains strong accounting for one-third of overall demand
With about 3.5 million sq ft of leasing, 3PL players continued to dominate leasing during Q1 2026 accounting for about one-third of Grade A demand across the top eight cities of the country. Space uptake by the segment was 1.8x times compared to Q1 2025 levels and was driven by network expansion, increased logistics outsourcing, and continued improvements in multi-modal connectivity.
Demand from E-commerce and Automobile players also remained firm and cumulatively accounted for about 32% of the leasing during the quarter. Both these segments saw over 1.5 million sq ft leasing during the quarter. Amidst continued diversification, FMCG and Electronics firms also saw over 2X leasing during the quarter, on an annual basis.
“3PL, E‑commerce and Automobile players together accounted for around two-thirds of the leasing activity during the quarter. Looking ahead, 3PL firms are expected to remain the dominant demand driver, supported by supply‑chain modernization. Simultaneously, E‑commerce demand will continue to gain traction supported by growing online consumption, faster delivery expectations, and expanding distribution footprints. However, the prolonged West Asia crisis remains a key monitorable factor, with potential implications for the Indian economy and the industrial and warehousing sector over the next few quarters.” says Vimal Nadar, National Director & Head, Research, Colliers India.
Large sized deals account for about 48% of the industrial & warehousing space demand
During the quarter, large deals (>200,000 sq ft) accounted for 48% of the demand at 5.3 million sq ft. Amongst these larger deals, E-commerce companies accounted for 34% of leasing. Large deals were also driven by 3PL and Automobile players significantly during the quarter with about 20-30% share each.
Published on:
15 April 2026
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