India’s Grade A/A+ warehousing sector continued to gain momentum in H1 CY’26, with demand outpacing new supply across the country. According to the CRE Matrix – CREDAI Grade A India Warehousing Report – Q2 CY’26, released in August 2026, the market recorded 34.9 million sq ft (msf) of demand against 28.7 msf of new supply, resulting in an absorption-to-supply ratio of 1.2x. Vacancy also continued its downward trajectory, falling to 7.9% in Q2 CY’26, a 0.9% decline from Q2 CY’25.
The market also saw a 3.4% quarter-on-quarter increase in Grade A/A+ market rent, marking a recovery after market rent trailed passing rent for the previous three quarters amid the record new-supply wave in 2025. Pune and MMR led national demand, together accounting for 43% of pan-India demand in H1 CY’26, while Pune and Chennai contributed 40% of supply additions. Meanwhile, 3PL, manufacturing and automotive businesses generated around 70% of total Grade A/A+ warehousing leasing demand in Q2 CY’26.
Why did warehousing demand outpace supply in H1 CY’26?
The Grade A/A+ warehousing market absorbed 34.9 msf in H1 CY’26, compared with 28.7 msf of new supply. This created a 1.2x absorption-to-supply addition ratio, indicating that occupiers leased space faster than developers added new capacity.
The market entered the second half of the year with 451.4 msf of current Grade A stock. CRE Matrix expects pan-India Grade A/A+ ready stock to reach 480 msf by the end of CY’26. At the same time, vacancy across the top seven cities declined by 0.9% between Q2 CY’25 and Q2 CY’26.
Pune and MMR remained the strongest demand centres, contributing 43% of pan-India Grade A/A+ demand, while Pune and Chennai together accounted for 40% of H1 CY’26 supply additions.
Which sectors drove leasing activity in Q2 CY’26?
Three sectors dominated Grade A/A+ warehousing leasing during the quarter. 3PL accounted for 32% of demand, manufacturing for 25%, and automotive for 13%, together contributing approximately 70% of total demand.
The remaining demand came from sectors including electrical/electronics, retail, e-commerce, pharma/life sciences and other occupiers. The strong contribution from 3PL, manufacturing and automotive businesses reflects the continued expansion of logistics networks, industrial activity and supply-chain infrastructure.
Large-format warehouses also dominated transactions. In Delhi-NCR, for example, transactions exceeding 1 lakh sq ft accounted for 93% of Q2 CY’26 transaction sizes, while the corresponding share stood at 86% in MMR, 85% in Pune and Chennai, and 71% in Bengaluru.
How did rents and vacancy move across the market?
Vacancy continued to tighten across India’s Grade A/A+ warehousing market, reaching 7.9% in Q2 CY’26, down 0.9 percentage points from Q2 CY’25. Market rent also regained momentum after remaining below passing rent for three consecutive quarters following the supply surge in 2025. The report recorded a 3.4% QoQ increase in market rent.
The report defines passing rent as the weighted average rent paid by all active tenants in a region, while market rent represents the weighted average rent paid by tenants for leases signed during the quarter.
The national market therefore entered H2 CY’26 with three notable indicators moving in a positive direction: stronger absorption, declining vacancy and improving market rents.
What did Delhi-NCR’s warehousing transactions reveal?
Delhi-NCR recorded 5.0 msf of H1 CY’26 demand against 4.8 msf of supply, producing a 1.0x demand-to-supply ratio. The region had 111.6 msf of current Grade A stock and a 7.3% vacancy rate. Q2 CY’26 passing rent stood 6.4% above Q2 CY’24.
Demand concentrated heavily in Luhari, which accounted for 61%, followed by Tauru at 14%, Noida at 8%, Sonipat at 8%, Badli at 5%, Manesar at 3% and Faridabad at 1%.
Some of the major Q2 CY’26 transactions were:
- Amazon: 697,348 sq ft at Welspun One Logistics Park, Hailey Mandi, at ₹25.9 per sq ft.
- Vishal Megamart: 212,884 sq ft at IndoSpace Logistics Park Luhari IV, at ₹21.4 per sq ft.
- TTK Prestige: 120,125 sq ft at Khewat No. 76/7, 98/2, 98/3, Kulana Jhajjar, at ₹19.0 per sq ft.
Why did MMR emerge as a key demand hub?
MMR recorded 6.6 msf of H1 CY’26 demand against 3.5 msf of supply, giving the region a 1.9x demand-to-supply ratio. Its current Grade A stock stood at 82.1 msf, while vacancy remained at 7.0%. Market rent increased 10.6% QoQ, making MMR one of the strongest rental-growth markets during the quarter.
Bhiwandi dominated demand with an 85% share, followed by Panvel at 5%, Mumbai Incity at 4%, Navi Mumbai at 3%, Kalyan at 3%, and Thane Incity at 1%.
Major Q2 CY’26 transactions included:
- RKJ Shakti Logistic Park: 782,946 sq ft at Shakti Logistics Park Phase 2, at ₹17.5 per sq ft.
- Amazon: 333,057 sq ft at Ecobox Bhiwandi, at ₹38.0 per sq ft.
- Parekh Integrated Services: 192,647 sq ft at Hiranandani Industrial Park, Bhiwandi, at ₹30.0 per sq ft.
The report notes that rentals and leasable area in MMR are reported on a carpet-area basis, while demand and supply are reported on a chargeable-area basis.
How did Pune strengthen its position in the national market?
Pune emerged as the strongest absorption market among the highlighted cities, recording 8.5 msf of H1 CY’26 demand against 6.1 msf of supply. The city achieved a 1.4x demand-to-supply ratio, while its current Grade A stock stood at 78.8 msf and vacancy remained at 6.0%. H1 CY’26 demand increased 17% compared with H2 CY’25.
Chakan accounted for 49% of demand, followed by Ranjangaon at 26% and Pimpri-Talegaon at 24%, with smaller contributions from Incity, Mulshi, Kondhwa and Manjri.
Pune recorded several significant transactions during Q2 CY’26:
- Envision Energy India: 332,691 sq ft at KSH Multi Modal Logistics and Industrial Park, Chakan Park 2, at ₹31.5 per sq ft.
- Automobile Carriers (AMC): 424,999 sq ft at Pragati Industrial and Logistics Park, Ranjangaon, at ₹24.2 per sq ft.
- Vertiv Energy: 249,375 sq ft at KSH Multi Modal Logistics and Industrial Park, Chakan Park 4, at ₹35.7 per sq ft.
What is driving Bengaluru’s Grade A warehousing market?
Bengaluru recorded 4.7 msf of H1 CY’26 demand against 4.5 msf of supply. The city had 62.2 msf of current Grade A stock, while vacancy stood at 11.7% in Q2 CY’26. Passing rent increased 3.6% compared with Q2 CY’25, while vacancy increased by 0.3 percentage points over the same period.
Neelamangala accounted for 44% of demand, followed by Hoskote & Soukya Road at 37%, Yelahanka at 12%, Bidadi at 4%, Bommasandra at 2% and Hosur at 1%.
The city’s Q2 CY’26 transactions included:
- Bharat Forge: 60,928 sq ft at Hitech Defence & Aerospace Park, at ₹35 per sq ft.
- Gears and Gear Drives India: 57,380 sq ft at Plot No. 7-P2-A, Bandi Kodigehalli Palya, Bengaluru, at ₹27.1 per sq ft.
- Motherson Automotive Technologies & Engineering: 42,914 sq ft at Plot No. 16-D, Manchanayakanahalli, Bengaluru, at ₹27.5 per sq ft.
Why is Chennai becoming a major contributor?
Chennai added 5.4 msf of supply in H1 CY’26 against 5.3 msf of demand, taking its current Grade A stock to 64.9 msf. Vacancy stood at 6.9%. H1 CY’26 supply increased 38.5% compared with H1 CY’25, while passing rent recorded a 3.7% three-year CAGR.
Puduvoyal accounted for 57% of demand, followed by Oragadam at 30%, Pollivakkam at 9%, Incity at 4% and Chengalpattu at 0%.
Major transactions included:
- Apollo Tyres: 436,426 sq ft at Ascendas Firstspace (Sun Logistics Park), Periyapalayam Industrial Park, at ₹24.3 per sq ft.
- Mahindra Logistics: 314,593 sq ft at Hiranandani Industrial Park, Sethupakkam, at ₹22.2 per sq ft.
- Control Component India: 141,116 sq ft at Hiranandani Industrial Park, at ₹27.3 per sq ft.
How is Hyderabad balancing new supply with leasing demand?
Hyderabad recorded 2.1 msf of H1 CY’26 supply against 1.9 msf of demand, with 26.2 msf of current Grade A stock and 9.2% vacancy. H1 CY’26 supply was 1.6x higher than H1 CY’25, while Q2 CY’26 passing rent increased 5.8% compared with Q2 CY’25.
Medchal dominated demand with 63%, followed by Shamshabad at 33%, Incity at 2%, Autonagar at 2%, Patancheru at 0%, and Vikarabad at 0%.
Q2 CY’26 transactions included:
- V-Guard Consumer: 120,383 sq ft at Survey No. 43/2, 43/3, Jeedipally, at ₹18.1 per sq ft.
- Qucev Technologies: 94,906 sq ft at ESR GMR Industrial & Logistics Park, at ₹33.0 per sq ft.
- Hero Motocorp: 60,310 sq ft at Survey No. 186, Yellampet, at ₹17.0 per sq ft.
What does Ahmedabad’s growth reveal about emerging markets?
Ahmedabad recorded 3.0 msf of H1 CY’26 demand against 2.3 msf of supply, taking current Grade A stock to 25.7 msf. Vacancy stood at 10.9%. Q2 CY’26 demand increased 72% compared with Q2 CY’25, while passing rent stood at ₹22.4 per sq ft and recorded a 3.5% three-year CAGR.
Bavla-Kerala accounted for 50% of demand, followed by Kheda at 33%, Sanand-Sachana-Vithalapur-Kadi at 13% and Jalisana-Becharaji at 4%.
Major Q2 CY’26 transactions included:
- Envision Energy: 500,000 sq ft at Shree Shakti Integrated Logistics.
- Torix Works: 203,784 sq ft at Hillway Logistic Park, at ₹13 per sq ft.
- Trico: 200,000 sq ft at Ashwika Park.
What can the H1 CY’26 numbers tell us about the rest of the year?
India’s Grade A/A+ warehousing market enters the second half of CY’26 with strong absorption, expanding stock and improving rental momentum. Demand of 34.9 msf already exceeds supply of 28.7 msf, while vacancy has fallen to 7.9%. The 1.2x absorption-to-supply ratio indicates that occupiers continue to absorb space at a faster pace than developers are adding new stock.
The geographical concentration also remains clear. Pune and MMR contributed 43% of national demand, while Pune and Chennai contributed 40% of supply additions. The sector mix remains led by 3PL, manufacturing and automotive, which together accounted for around 70% of Q2 CY’26 leasing demand.
With 451.4 msf of current Grade A stock and expected Grade A/A+ ready stock of 480 msf by the end of CY’26, the market is set for further capacity expansion. At the same time, the 3.4% QoQ increase in market rent suggests that stronger leasing activity is beginning to support rental growth after the supply-led moderation seen in 2025.
Overall, the Q2 CY’26 data points to a Grade A warehousing market that is expanding without allowing supply to significantly outpace occupier demand. Strong transactions across Pune, MMR, Delhi-NCR, Bengaluru, Chennai, Hyderabad and Ahmedabad further underline the depth and geographical spread of India’s organised warehousing demand.
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