India’s industrial and warehousing real estate market recorded a strong start to 2026, with leasing activity reaching record levels in the first quarter, according to a reportreport by JLL. The sector’s cumulative stock across eight major cities rose to 51.4 crore sq. ft., marking a 13% year-on-year increase.
JLL estimates that the market will expand to nearly 85 crore sq. ft. by 2030, reflecting a compound annual growth rate (CAGR) of 11.4%. Gross absorption during the January–March 2026 period stood at 1.83 crore sq. ft., underlining sustained demand from manufacturing and logistics occupiers.
Manufacturing Emerges as Key Demand Driver
Manufacturing accountedaccounted for 28% of total leasing activity during the quarter, translating to approximately 51 lakh sq. ft. of absorption. The engineering sector led manufacturing demand with a 47% share, followed by the auto and ancillaries segment at 32%.
Pune and Chennai emerged as the leading markets for manufacturing-led demand, reflecting continued investments in industrial production and supply chain infrastructure.
Grade A Space Gains Momentum
Commenting on the market’s performance, Yogesh Shevade, Managing Director and Head of Industrial & Logistics, India, JLL, said that the sector is witnessing a growing preference for high-quality industrial assets.
“India’s industrial and warehousing market continues to evolve with increasing concentration of Grade A space, which grew nearly 20% year-on-year to reach 293 million sq. ft., representing 57% of the total market stock,” he said.
He added that occupiers are increasingly adopting strategic real estate solutions to navigate challenges such as land acquisition complexities and rising construction costs.
Warehousing Continues to Dominate
Warehousing remained the largest contributor to leasing activity, accounting for 72% of total gross absorption during the quarter at 1.32 crore sq. ft. Third-party logistics (3PL) companies emerged as the primary demand drivers, followed by e-commerce and retail players.
Mumbai and Pune collectively accounted for 43% of total absorption, highlighting their importance as key logistics and distribution hubs.
Top Performing Cities
Mumbai led the market with a 22% share of total leasing activity, closely followed by Pune at 21%. Delhi NCR contributed 20%, while Bengaluru and Chennai accounted for 13% and 12%, respectively.
Together, these five cities represented 88% of India’s total industrial and warehousing real estate activity during the first quarter, reinforcing their position as the country’s dominant industrial and logistics markets.
The report highlights continued momentum in India’s industrial real estate sector, supported by expanding manufacturing activity, robust logistics demand, and growing investments in Grade A warehousing infrastructure.
