Manufacturing, auto sectors drive India's logistics and industrial space in H1 2026: Report
New Delhi, August 4
Manufacturing, automobile and third-party logistics companies continued to drive demand in India's logistics and industrial real estate market during the first half of 2026, reflecting expanding industrial activity and supply chain requirements across the country, according to a Cushman & Wakefield report.
The report said gross leasing across the top eight cities reached 36.2 million square feet (MSF) in H1 2026, the highest ever recorded for the first half of a calendar year, with demand supported by strong activity across warehousing and industrial facilities. Overall leasing rose 18 per cent year-on-year and was 2 per cent higher than the second half of 2025.
Warehouse leasing remained the largest segment at 24.3 MSF, accounting for 67 per cent of total leasing activity, while industrial leasing rose to nearly 12 MSF during the first half of the year.
Third-party logistics (3PL) operators continued to drive momentum, accounting for 12.2 MSF of leasing and 34 per cent of total demand. Engineering and manufacturing (E&M) companies followed with 10.2 MSF, contributing 28 per cent of overall leasing. Together, the two sectors accounted for more than 60 per cent of total absorption during the period.
The automobile sector also emerged as a key growth driver, accounting for 4.8 MSF of leasing, or 13 per cent of total demand, with leasing by automobile occupiers nearly doubling compared with H1 2025.
Delhi NCR recorded the highest leasing activity among the eight cities with 8.7 MSF, followed by Chennai at 6.1 MSF and Pune at 5.9 MSF. Delhi NCR also posted the strongest year-on-year growth at 69 per cent, while Chennai and Pune recorded growth of 39 per cent and 32 per cent, respectively.
Commenting on the findings, Abhishek Bhutani, Managing Director, Logistics & Industrial Services, Cushman & Wakefield, said, "Despite an external environment marked by geopolitical tensions and trade-related uncertainties, occupier demand has remained resilient. While businesses have adopted a more measured approach to decision-making in recent months, expansion plans remain firmly on track, reflecting long-term confidence in India's manufacturing and consumption story."
The report said demand is expected to remain supported in the second half of 2026 by seasonal activity from the e-commerce, retail and automobile sectors, although global developments may continue to influence the pace of business decisions.
— ANI
Reader Comments
Delhi NCR's 69% growth is remarkable! The warehousing boom around the National Capital Region makes sense with all the new highways and the Eastern Peripheral Expressway making connectivity so much better. Supply chain efficiency is improving.
Interesting data, but I wonder how much of this is speculative land-banking vs actual operational demand. In the US we saw similar numbers before some oversupply. Hope Indian developers are being realistic about absorption timelines.
The automobile sector doubling its leasing is what catches my eye. With all the EV and battery manufacturing coming up in Chennai and Pune, this momentum will only accelerate. South India is doing y'all proud! 🚗⚡
Cushman & Wakefield's data is solid, but as someone working in supply chain consulting, I'd note that 3PL demand often gets overstated because companies outsource rather than build in-house. Still, the underlying manufacturing activity is clearly genuine.
Happy to see Chennai in top 3! The port connectivity and automotive ecosystem there are unmatched. Hopefully this translates to more local jobs, not just more warehouses. Growth must benefit the common worker too. 🙏
The 14% vacancy rate mentioned in similar reports is concerning
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