Mumbai leads warehousing surge with 459% jump in Q2 2026: Report

Mumbai's warehousing sector saw a 459% annual surge in Q2 2026, leading all markets with 5.04 msf of space absorbed. Mumbai and Pune together accounted for 65% of total national absorption, with 3PL providers being the dominant occupiers.

Mumbai registered a 459 per cent annual surge in India's warehousing and logistics sector absorption during the second quarter of 2026, leading key industrial hubs across the country.

According to a report by Vestian, Mumbai led all individual markets with 5.04 million square feet (msf) of space absorbed, supported by concentrated leasing activity in its Bhiwandi corridor, which generated nearly 69 per cent of the city's total volume. Overall absorption across the top seven cities reached 10.56 msf in Q2 2026, pushing the total for the first half of the year to 22.0 msf. This marked the highest first-half leasing volume in a year, expanding by 16 per cent year-on-year and 11 per cent over the second half of 2025 despite persistent global headwinds.

Regional Market Highlights

Mumbai and Pune together commanded 65 per cent of total national absorption, up from 33 per cent during the same quarter last year. Pune followed as the second-largest contributor at 1.78 msf, though its sequential share moderated to 17 per cent after significant transaction closures recorded during the preceding quarter.

Across other regions, NCR recorded 1.24 msf in leasing activity, representing a 70 per cent quarter-on-quarter increase and a 75 per cent growth from a year earlier. Bengaluru recorded a recovery with 0.97 msf, while Chennai reached 0.69 msf, reflecting a 17 per cent sequential gain and 52 per cent year-on-year rise. Kolkata grew to 0.38 msf, rebounding from minimal activity in Q1 2026 to post a 212 per cent annual increase. Hyderabad recorded 0.46 msf, down 34 per cent sequentially while holding steady compared to Q2 2025.

Key Occupier and Investment Trends

Third-party logistics (3PL) providers maintained dominant occupier interest, accounting for 41 per cent of total leasing activity. Consumer Goods & Services followed with 12 per cent, while Engineering & Manufacturing secured 11 per cent, bringing their combined contribution to 64 per cent of all absorbed space during the period. Energy, Automobiles & Auto Components, and Chemicals & Petrochemicals collectively held a 22 per cent share.

Institutional investments totalled USD 27 million in Q2 2026, reflecting a selective stance by global investors amid broader economic uncertainty.

Sector Transformation and Future Outlook

Shrinivas Rao, FRICS, CEO, Vestian, said, "India's warehousing sector is undergoing a structural transformation, evolving beyond traditional priorities such as supply chain optimization, operational efficiency, and proximity to demand centres."

Highlighting changing occupier preferences, Rao added, "Sustainability has emerged as a key differentiator, with occupiers increasingly seeking Grade-A green warehouses that align with their ESG commitments and long-term business objectives."

"Backed by supportive government policies and sustained infrastructure development, this transition is expected to accelerate further, reinforcing the sector's appeal to both global occupiers and long-term institutional investors," Rao stated.

As per the report, going forward, demand from 3PL, Engineering & Manufacturing, and Consumer Goods & Services is expected to remain the primary driver of leasing activity. Continued investments in multimodal infrastructure, technology-enabled warehousing, and supply chain modernization are likely to sustain occupier demand while gradually strengthening institutional investor confidence in the sector. (ANI)

(Except for the headline, this story has not been edited by Asianet Newsable English staff and is published from a syndicated feed.)