Bengaluru's warehouse leasing surges 78%, remains key logistics hub

Bengaluru recorded the fastest growth in warehouse leasing among India's top markets, surging 78% year-on-year to 3.1 million sq ft in H1 2026. This strong demand has led to a 4-5% rise in rentals and a 9-10% increase in land prices.

Bengaluru is expected to remain a key logistics and warehousing hub as strong occupier demand continues to support leasing activity, with warehouse rentals already rising 4-5 per cent annually and land prices increasing 9-10 per cent in H1 2026, according to Cushman & Wakefield.

Record Leasing Growth in H1 2026

The city recorded the fastest growth in warehouse leasing among India's top eight markets during the first half of 2026. Warehouse leasing in Bengaluru surged 78 per cent year-on-year to 3.1 million square feet (MSF) in H1 2026, while leasing rose 64 per cent compared with H2 2025, according to Cushman & Wakefield's H1 2026 Logistics & Industrial MarketBeat report.

The city's overall logistics and industrial market also maintained strong momentum, with gross leasing reaching 4.4 MSF during the first half of the year, representing a 63 per cent increase over H2 2025. The strong demand came despite the addition of nearly 2 MSF of new Grade A warehouse supply during the period. Vacancy levels consequently declined to 11 per cent from 13 per cent, indicating that occupier demand continued to absorb new capacity.

Western Corridor Dominates Market

Bengaluru's western corridor remained the dominant warehousing destination, accounting for 52 per cent of total warehouse leasing during H1 2026. The activity was led by Nelamangala and Dabaspete. The eastern submarket accounted for another 46 per cent, driven by demand in Hoskote, while the northern and southern submarkets contributed the remaining share.

3PL Companies Lead Occupier Demand

Third-party logistics (3PL) companies emerged as the largest occupier segment, accounting for 58 per cent of warehouse leasing. Manufacturing firms contributed 16 per cent, followed by e-commerce at 15 per cent and FMCG companies at 8 per cent.

Industrial Segment Shows Resilience

The industrial segment also remained resilient, recording nearly 1.4 MSF of leasing during H1 2026. North Bengaluru accounted for 35 per cent of industrial demand, led by Doddaballapur and KIADB Hardware Park at Devanahalli, while the western submarket contributed 28 per cent.

Headline industrial rentals also increased 3-4 per cent annually during H1 2026, pointing to continued pricing momentum alongside sustained demand for logistics and industrial space. (ANI)

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