New Delhi

India's Grade A industrial and warehousing supply is likely to reach 45-50 million square feet by the end of 2026, supported by a strong development pipeline and positive investor sentiment, according to a Colliers report.

The report said infrastructure-led development and expanding domestic manufacturing are expected to support demand for industrial and warehousing space through 2026.

"Looking ahead, a strong development pipeline and upbeat investor sentiment are expected to drive Grade A supply to 45-50 million sq ft by the end of 2026," said Vimal Nadar, National Director and Head of Research, Colliers India. He said developers remain confident about the sector's long-term growth despite global uncertainties.

According to the report, industrial and warehousing demand remained strong in the first half (H1) of 2026, with leasing across the top eight cities rising 12 per cent year-on-year to nearly 22 million square feet.

Delhi NCR and Chennai together accounted for over 45 per cent of the total demand during the period.

The report said leasing in the second quarter stood at around 11 million square feet, down 1 per cent from the previous quarter due to supply chain disruptions caused by the ongoing conflict in West Asia. However, it added that demand is likely to improve in the coming quarters if global volatility remains limited.

Third-party logistics (3PL) companies remained the largest occupiers during H1 2026, accounting for 30 per cent of total leasing. Engineering firms followed with a 21 per cent share, while e-commerce companies accounted for 16 per cent. The electronics segment also recorded nearly two-fold annual growth, indicating growing diversification in demand.

On the supply side, new completions rose 27 per cent year-on-year to about 25 million square feet during H1 2026, exceeding demand. Delhi NCR and Mumbai together accounted for more than 40 per cent of the new supply. Overall vacancy levels increased to 17.2 per cent as supply outpaced absorption.

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The report said infrastructure expansion, growth in domestic manufacturing and easing global headwinds are expected to support the industrial and warehousing sector's growth through 2026.