Market Report
India Warehousing & Logistics Sector Review
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Key Insights
1
~24 Mn sq ft of absorption, the highest level ever recorded
2
~15 Mn sq ft of new completions; rose by 53% over the previous quarter
3
Pan-India single-digit vacancy of 8.4%
Key Takeaways
- India's office market continued to maintain strong growth momentum during the second quarter of 2026 despite heightened global macroeconomic uncertainty and geopolitical tensions. Absorption increased by 27% year-on-year and 11% quarter-on-quarter, reaching 23.9 Mn sq ft in Q2 2026.
- Southern cities—Bengaluru, Chennai, and Hyderabad—accounted for 54% of the total absorption in Q2 2026; the share has increased from 49% in the previous quarter. Meanwhile, the share of Western cities declined during the quarter, from 35% in Q1 2026 to 25% in Q2 2026, primarily due to a momentary slowdown in leasing activity in Mumbai.
- IT-ITeS sector continued to dominate office demand with 41% share of the pan-India absorption in Q2 2026. Managed Offices/Coworking/Flexible Spaces remained the second-largest occupier category with 22% share, highlighting sustained demand for agile workplace solutions amid the growing prominence of GCCs.
- Construction activities rebounded sharply during Q2 2026, with new completions increasing by 53% quarter-on-quarter to 14.9 Mn sq ft. However, on a yearly basis, new completions remained largely stable with marginal growth of 1%.
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