Strong growth continues: 1.91 mn sq ft of net absorption in Q1 2026

• The market saw net absorption reach 1.9 mn sq ft and the gross absorption at 2.9 mn sq ft. Among the submarkets, Tumkur Road had the largest share, followed by Hoskote – Devanahalli, and Hosur Road-Hosur City.
• The main drivers behind this increased demand were 3PL/ Logistics and Engineering players, who accounted for 54% of the total demand during this quarter. Additionally, Electronics, FMCG, and E-Commerce sectors also made significant contributions to the demand.

A significant ~80% of new Grade A supply is in institutionally backed projects

• In the quarter, the warehouse market experienced an addition of 1.6 mn sq ft of space, up 3.0% q-o-q. Hoskote-Devanahalli emerged as the area with the highest influx of new supply, followed by Tumkur Road and Hosur Roaad.
• The vacancy declined with demand exceeding supply during the quarter, reaching 9.5% in Q1 2026, a 60 bps decrease q-o-q. Notably, the vacancy of prime grade A spaces is considerably low at 3.0% in Q1 2026.

Rising demand for prime Grade A spaces fuels rental growth

• The rents have risen by 4.1% y-o-y on the back of increased demand, increased traction from institutional developers/ investors and an increase in land rates.
• This upward trend in rents is expected to continue in the foreseeable future, primarily propelled by heightened investments from institutional investors and developers such as Indospace, Ascendas, Welspun, NDR, Horizon Industrial Parks etc.

Outlook: Proposed infrastructure projects to propel upcoming warehousing demand to 9.5 mn sq ft in 2026

• Bengaluru’s warehousing sector is set for significant growth in 2026 and 2027, with the total stock expected to reach 79.3 mn sq ft. This expansion is expected to be driven by new Grade A developments, supported by key institutional investors.
• The warehousing demand in Bengaluru is fueled by various proposed infrastructure projects, including Industrial and economic corridors such as BMIC and CBIC. With the increasing demand, the vacancy is likely to remain under 8% over the next 4 years.