India set for rapid industrial realty boom

BENGALURU: India's industrial and warehousing sector is set for another strong year in 2026 with average annual demand of 30-40 million square feet, driven by expanding manufacturing activity and rising investor interest across cities and logistics corridors beyond traditional hubs.Manufacturing-led policies, improving infrastructure, and changing distribution methods will help maintain strong absorption, with occupiers focusing on faster turnaround times and large high-quality facilities, investment firms and industry experts said.The sector saw 26.5 million square feet of leasing in the first nine months of 2025, according to commercial real estate services firm Colliers. This was an 11% rise over the same period last year.This was despite multinational players being cautious with their investments amid global trade uncertainties."Their continued expansion reflects the deepening trend of outsourcing logistics functions as manufacturers and retailers seek operational efficiency, flexibility and faster turnaround times," said Vijay Ganesh, managing director for industrial & logistics at Colliers India. "Ecommerce and engineering and manufacturing (E&M) occupiers also stepped up space take-up during the year, supported by steady consumption demand and improving industrial output," he said.A recent study by JLL noted that institutional investments accounted for only 8% of the total $10.4 billion in capital deployed in real estate in the country in 2025.126178206During the year, Industrial and logistics leasing activity remained concentrated in leading markets, with Delhi NCR, Bengaluru and Hyderabad together accounting for nearly 60% of total absorption.These cities continued to benefit from strong infrastructure, proximity to consumption centres and deep occupier ecosystems.The next year is also projected to have a lot of big deals of above 100,000 square feet.Such deals made up 38% of total absorption in the first nine months of 2025, up from 27% a year earlier, according to Colliers.126178212Tenants are increasingly choosing to consolidate and grow, experts said. Third-party logistics (3PL), ecommerce, and manufacturing companies are optimising their distribution networks. "Companies are making long-term capital commitments to India and are increasingly selective about infrastructure that can support scale, reliability and compliance across their supply chains," said Anshuman Singh, chief executive and managing director of leading logistics developer IndoSpace."As we move into 2026, demand will continue to consolidate around developers that can deliver consistent, scalable manufacturing infrastructure with embedded ESG standards, where sustainability, governance and safety are baseline expectations rather than differentiators," Singh said.One of the leading domestic logistics players, Welspun One's managing director Anshul Singhal expects investments to become more discerning than cautious next year. "We will see a clear separation between institutional-grade platforms having operating depth and balance-sheet discipline, and the rest of the market," he said. India's industrial and warehousing market saw strong occupier activity in 2025, led by large-scale logistics, ecommerce and manufacturing players.