Monday, 9 March 2026
India’s logistics property sector is entering a period of recalibration after several years of rapid expansion. Strong demand from e-commerce companies, manufacturing firms and distribution providers pushed warehouse leasing to record levels during 2024 and 2025. As the market moves into 2026, activity remains healthy, although the pace of new leasing has begun to moderate as businesses reassess inventory levels and refine supply chain strategies.
Industry research indicates that leasing activity across the country’s primary logistics markets approached nearly 37 million square feet during 2025, marking a clear increase compared with the previous year. The growth was supported by continued development of online retail platforms, the expansion of domestic manufacturing and the increasing complexity of distribution networks serving India’s large consumer base.
Despite the strong performance of the past two years, the opening months of each year often bring a temporary adjustment for warehouse demand. Following the intense retail cycle associated with the festive season, companies frequently review their stock levels and operational requirements. This process can briefly slow the pace of new leasing as businesses evaluate how much space they need for the coming months.
Early indications from 2026 suggest that the sector is experiencing such a pause. After expanding warehouse networks aggressively in recent years, some occupiers are now focusing on improving efficiency within existing facilities. Sectors such as consumer goods, electronics and pharmaceuticals have been adjusting stock levels after a period of rapid inventory buildup, leading to a short-term cooling of new leasing activity.
Even with this adjustment, several regions continue to dominate logistics demand. Areas surrounding Delhi-NCR, Chennai and Pune remain among the most active distribution corridors due to their strategic connections to manufacturing centres, transport infrastructure and major consumer markets. These locations are supported by expanding highway networks, industrial parks and freight corridors that are gradually improving the efficiency of goods movement across the country.
Another notable feature of the sector is the rising importance of modern logistics facilities. Developers are increasingly delivering warehouses built to higher technical standards, offering larger floor plates, improved loading capabilities and better operational efficiency. Such facilities are becoming the preferred option for large occupiers seeking to streamline distribution operations and incorporate advanced logistics technologies.
Third-party logistics providers continue to play a major role in shaping the market. These companies manage storage and distribution functions on behalf of manufacturers and retailers, enabling businesses to outsource complex supply chain operations. Over the past several years, these operators have become one of the largest sources of demand for warehouse space, reflecting the growing trend toward specialised logistics management.
Alongside established metropolitan hubs, smaller cities are also gaining attention from investors and occupiers. Improvements in transport connectivity and the emergence of regional manufacturing clusters are encouraging companies to locate distribution centres closer to emerging consumption markets. As a result, warehousing capacity in secondary cities has expanded rapidly in recent years.
Rental levels across major logistics markets recorded moderate increases during 2025 as demand for high-quality facilities strengthened. Although the early months of 2026 may bring a slight increase in available space in some markets due to new project completions, industry observers expect well-located modern facilities to continue attracting tenants.
Developers are also responding to changing occupier requirements by offering more tailored leasing arrangements. In some cases, tenants are committing to space before construction is completed, allowing facilities to be designed around specific operational needs. This approach provides developers with greater certainty regarding occupancy while enabling companies to secure strategically located distribution centres.
Looking ahead, the longer-term outlook for India’s warehouse sector remains closely tied to broader economic trends. Government initiatives aimed at strengthening domestic manufacturing, together with global supply chain diversification strategies, are expected to support continued investment in logistics infrastructure. At the same time, rising consumption and the expansion of organised retail networks will likely sustain demand for efficient distribution systems.
While the beginning of 2026 may reflect a temporary adjustment following the exceptional growth of recent years, the underlying drivers of warehouse demand remain firmly in place. As companies continue to modernise supply chains and expand their distribution networks, India’s logistics property market is expected to remain an important component of the country’s evolving economic landscape.
Source: CIJ.World India Research & Analysis Team
