India’s warehousing and logistics sector witnessed a more balanced mix of occupier activity across industry segments in Q3 2026. Unlike the previous quarter, where third-party logistics (3PL) accounted for 41% share of the pan-India absorption its share declined to 29% in the current quarter, although it continued to lead leasing activity. Engineering & Manufacturing and Automobiles & Auto Components sectors followed with 23% and 14% share, respectively. Apart from reporting its highest absorption of 1.5 Mn sq ft in any quarter over the past 7 years, the Automobiles & Auto Components sector also recorded its highest-ever share in the pan-India absorption over the same duration. Together, these three sectors accounted for two-thirds (66%) of the total absorption, while Electronic Components & Equipment, Consumer Goods & Services, Energy, Chemicals and Petrochemicals, and Information Technology collectively contributed another 24%.
Driven by sustained occupier demand across industry segments, India’s warehousing and logistics sector recorded an absorption of 10.58 Mn sq. ft. in Q3 2026. Despite geopolitical uncertainties and mounting macroeconomic pressures, leasing activity remained resilient, edging up 0.2% quarter-on-quarter and registering 15% year-on-year growth. Cumulative absorption reached 32.6 Mn sq. ft. in the first nine months of 2026, marking the highest level recorded over the past three years.
Robust demand, consistent infrastructure upgrades, and government-led policy support in the sector continued to strengthen investor sentiment. Hence, the sector attracted institutional investments worth USD 332 Mn in Q3 2026. Investments accounted for 17% of the total quarterly investments, the highest in any quarter over the past 2 years.
Shrinivas Rao, FRICS, CEO, Vestian said, “India’s warehousing and logistics sector is consistently evolving beyond traditional demand drivers, with increased participation from manufacturing, automotive and other industrial segments complementing the established 3PL sector. Sustained occupier demand, infrastructure upgrades, and policy support continue to strengthen the sector’s long-term potential. Furthermore, investor sentiment remains strong as India’s expanding consumption base and manufacturing ecosystem create opportunities for modern and efficient warehousing.”
City-wise Absorption
| City | Q3 2026 | Q2 2026 | Q3 2025 | Q3 2026 vs Q2 2026 | Q3 2026 vs Q3 2025 |
| Bengaluru | 0.71 | 0.97 | 0.13 | -27% | 445% |
| Chennai | 2.89 | 0.69 | 1.13 | 320% | 156% |
| Hyderabad | 0.68 | 0.46 | 0.47 | 48% | 44% |
| Pune | 2.20 | 1.78 | 0.64 | 24% | 245% |
| Mumbai | 2.70 | 5.04 | 4.29 | -46% | -37% |
| Kolkata | 0.13 | 0.38 | 1.26 | -67% | -90% |
| NCR | 1.27 | 1.24 | 1.28 | 3% | -1% |
| Pan-India | 10.58 | 10.56 | 9.20 | 0.2% | 15% |
Source: Vestian Research
- Registering a quarterly and annual growth of 320% and 156%, Chennai led leasing activity in India with an absorption of 2.89 Mn sq ft, supported by robust absorption across the micromarkets of Sriperumbudur and Thiruvallur.
- Mumbai, which had been leading the leasing momentum over the past one year, ranked second, recording an absorption of 2.70 Mn sq ft. The growth momentum, however, declined by 46% quarterly and 37% annually.
- Accounting for 21% share of the pan-India absorption, Pune recorded an absorption of 2.2 Mn sq ft, rising 245% annually. Micromarkets of Varale, Khed, and Chakan, backed by occupiers in the Engineering & Manufacturing sector, kept the leasing momentum healthy across the city. NCR followed with an absorption of 1.27 Mn sq ft, registering a quarterly growth of 3%.
- Despite witnessing a quarterly and annual growth of 48% and 44%, Hyderabad recorded an absorption of 0.68 Mn sq ft, accounting for a mere 6% of the pan-India absorption. On the other hand, with an absorption of 0.71 Mn sq ft, leasing activity grew by 445% annually in Bengaluru due to the low base effect.
- With absorption declining by 67% quarterly and 90% annually, Kolkata recorded the lowest quarterly absorption of 0.13 Mn sq ft in Q3 2026.
Looking ahead, sustained occupier demand across industry segments is expected to accelerate the uptake of modern, technology-enabled warehousing across established and emerging logistics hubs. Strengthening policy support and infrastructure development will further enhance the sector’s growth potential, paving the way for greater institutional participation and investment opportunities across India’s evolving warehousing and logistics landscape.
About Vestian:
Vestian is an occupier-focused workplace solutions firm specializing in commercial, residential, industrial, retail and hospitality sectors. Headquartered at Chicago, Vestian has offices across US, India, China, UK, Sri Lanka and the Middle East. Our core strength lies in providing customized innovative solutions that are aligned to the client’s business objectives. Our extensive service portfolio includes Investment & Consultancy Services, Transaction Advisory Services, Project Services, Retail Business Solutions and Integrated Facilities Management Services. Vestian is the only global workplace solutions organization to be certified in both quality management systems and environmental health & safety standards such as ISO 9001, ISO 14001, ISO 45001 and ISO 37001. For further information on the company, you can visit us at www.vestian.com