Strong growth continues with 4.47 mn sq ft of gross absorption in Q1 2026

• Q1 2026 saw warehousing demand surge 41%+ y-o-y, reflecting rising logistics needs & strategic location preferences in the region. Net absorption hit 2.8 mn sq ft. Delhi-NH8 led among the submarkets, followed by Faridabad-Palwal & Sonipat-Hassangarh clusters.
• 3PL dominated the strong demand in Q1 2026. Electronics, FMCG, engineering, and e-commerce sectors also made notable contributions. Occupiers consistently showed a strong preference for high-quality, compliant Grade A spaces.

New supply driven by institutionally-backed Grade A projects

• The warehousing market expanded significantly this quarter, with 4.2 mn sq ft of new space added. The Delhi – NH8 area led in terms of new supply, with Faridabad – Palwal and Sonipat – Hassangarh following as the next most active areas for warehousing development.
• Vacancy rose slightly to 20% in Q1 2026 due to new supply outpacing demand. Grade B space saw a notable increase in speculative supply, causing its vacancy to climb to 28.5% in Q1 2026, highlighting the growing mismatch between Grade B supply and demand in the market.

Prime Grade A demand spike drives 2.2% y-o-y rental surge

• Robust demand for Grade A warehousing space, coupled with stable vacancy and growing interest from institutional developers and investors, has driven a significant 2.2% y-o-y increase in rental prices. Rising land costs are also driving this upward trend.
• Rents are predicted to keep rising in the near term, due to increased investment from major institutional players. Companies like Indospace, Horizon Industrial Parks, LO-GOI, Ascendas, Welspun, etc. are driving this trend with significant investments in the market.

Outlook: Infrastructure projects expected to boost 2026 warehousing demand

• NCR warehousing stock is projected to reach 121.3 mn sq ft by 2026, primarily driven by institutional Grade A. Delhi-NH8 will maintain its high level of activity, leading in supply & demand. This growth reflects the importance of NCR in India’s logistics network.
• Proposed infrastructure projects such as DMIC, WDFC, and EDFC, are significantly influencing warehousing demand. These developments, coupled with the increasing e-commerce and 3PL sector growth, are expected to keep vacancy below 15% for the next four years.