Delhi NCR and Chennai drive 45% of India warehousing demand in H1 2026
Industrial and warehousing leasing across eight cities rose 12% year on year to 21.9 million sq ft, Colliers said. Delhi NCR absorbed 5.9 million sq ft and Chennai 4.1 million sq ft, while e-commerce contributed 16% of leasing demand.
What happened
Colliers India · India’s top-eight-city warehousing leasing rose 12% to 21.9 million sq ft in H1 2026, led by Delhi NCR and Chennai. E-commerce represented 16%
Key facts
- Industrial and warehousing leasing rose 12% YoY to 21.9 million sq ft in H1 2026
- Delhi NCR and Chennai accounted for over 45% of demand
- Q2 leasing was nearly 11 million sq ft, down 1% sequentially
- Delhi NCR absorbed 5.9 million sq ft; Chennai absorbed 4.1 million sq ft
- 3PL accounted for 30% of leasing; e-commerce accounted for 16%
- Electronics demand nearly doubled to 1.4 million sq ft
- New Grade A supply rose 27% YoY to 24.7 million sq ft
- Vacancy reached 17.2%
- Grade A supply is projected at 45-50 million sq ft by end-2026
Why this matters
Target logistics, fulfillment, and warehouse-platform partnerships in Delhi NCR and Chennai, where demand concentration is strongest and elevated Grade A availability may create attractive acquisition or JV opportunities.
What to watch
- Quarterly net absorption versus new Grade A completions and whether vacancy stays above 17%.
- Effective rents, rent-free periods and fit-out incentives in Delhi NCR and Chennai rather than headline lease rates.
- E-commerce, quick-commerce, grocery and 3PL share of leasing demand after the festive season.
- Pre-commitment levels for under-construction projects and any deferrals or cancellations by developers.
- Availability and pricing of last-mile, cold-storage and automation-capable space near dense consumption zones.
- Changes in freight, fuel, urban access and labor costs that could offset warehouse-rent savings.
- Retailers should reopen warehouse renewals and seek rent-free periods, stepped rents, expansion rights and landlord-funded automation or cold-chain fit-outs.
- E-commerce and omnichannel chains should use softer market conditions to add Delhi NCR and Chennai capacity before festive and same-day-delivery demand tightens prime nodes.
- 3PLs should prioritize multi-client, flexible facilities over speculative single-tenant commitments until absorption catches up with supply.
- Developers should slow speculative launches in weaker corridors and differentiate assets through automation readiness, power reliability, ESG credentials and proximity to consumption clusters.
- Retail supply-chain teams should reassess whether lower occupancy costs justify regional inventory pooling, which can reduce stock duplication but may raise last-mile delivery complexity.