India’s Warehousing Leasing Rises 12% in Q3 2026; Chennai Records Strong Manufacturing Demand
Chennai: India’s industrial and warehousing leasing activity increased 12% year-on-year to 19.1 million sq. ft. during the third quarter of 2026, driven by manufacturing and third-party logistics (3PL) companies, according to Knight Frank India’s latest Warehousing Market Report.
Leasing across eight major markets reached 55.9 million sq. ft. during the first nine months of 2026, registering 14% growth compared with the corresponding period last year.
Manufacturing and 3PL companies accounted for 76% of leasing activity during Q3. Manufacturing contributed 46% of year-to-date demand, while 3PL operators accounted for 31%.
Chennai Sees Manufacturing Demand Recovery
Chennai recorded warehousing and industrial leasing of 5.7 million sq. ft. during the first nine months of 2026, an 11% decline year-on-year. However, the market showed signs of recovery during Q3, with leasing reaching 2.7 million sq. ft., up 18% compared with the same quarter last year.
Chennai accounted for 22% of the country’s manufacturing-related leasing activity during Q3, the highest share among the eight markets.
The city’s average warehouse rent increased 4% year-on-year to ₹25.9 per sq. ft. per month in Q3 2026, compared with ₹24.9 a year earlier.
Chennai’s total industrial and warehousing stock stood at 46.5 million sq. ft., with vacancy at 10.3%. Grade A facilities accounted for 78% of the city’s warehousing stock, the highest proportion among the markets covered in the report.
Mumbai and NCR Lead National Growth
Mumbai recorded the highest year-to-date leasing volume at 15.5 million sq. ft., registering 55% annual growth. NCR followed with 10.1 million sq. ft., up 14%.
Bengaluru recorded 6.2 million sq. ft., an increase of 25%, while Ahmedabad registered 5.9 million sq. ft., growing 20%.
Pune recorded a 23% decline to 6.2 million sq. ft., while Kolkata and Hyderabad registered growth of 2% and 10%, respectively.
Manufacturing and Logistics Drive Demand
Manufacturing leasing increased 15% year-on-year to 25.5 million sq. ft. during the first nine months of 2026. Meanwhile, 3PL leasing grew 27% to 17.1 million sq. ft.
The report noted that manufacturing demand was expanding beyond traditional automotive hubs such as Chennai and Pune, with Mumbai, Bengaluru, Hyderabad and Kolkata also recording increased activity.
India’s total industrial and warehousing stock across the eight markets reached 597.7 million sq. ft. in Q3 2026, with an overall vacancy rate of 11.5%.
Knight Frank expects manufacturing expansion and supply-chain outsourcing to remain key drivers of warehousing demand, although higher energy, freight and financing costs could affect leasing decisions in the coming quarters.
