Robust market momentum as demand grows 2X q-o-q to 3.9 mn sq ft

• Bengaluru’s warehousing demand doubled q-o-q, with net absorption reaching 3.9 mn sq ft. Tumkur Road led demand, followed by Hoskote-Devanahalli and Hosur Road-Hosur City, reflecting the overall market’s robust growth trajectory.
• Grade A space captured ~60% of demand, reflecting occupier preferences for high-specification facilities. Key occupier segments driving demand included 3PL/logistics, followed by consumer sectors (e-commerce, FMCG, retail) and manufacturing.

Grade A supply contributed 56% of the new supply of 3.7 mn sq ft

• The new supply has more than doubled from the previous quarter reaching 3.7 mn sq ft, out of which 56% was of Grade A quality. The new Grade A supply addition was primarily driven by institutional investors and well-known developers in the market.
• With the rising demand in the market, the vacancy fell 80 bps q-o-q. Notably, the Grade A vacancy is considerably low at 2.2% at the end of Q2 2026 showing occupiers’ preferences for quality spaces amid limited supply in the market.

Rents up 4.5% y-o-y with rising demand for Grade A warehousing spaces

• With the rising demand for prime Grade A warehousing spaces, growing traction from institutional investors and increasing land prices, the overall rents have increased by 4.5% y-o-y, reaching INR 24.7 per sq ft per month in Q2 2026.
• The upward trend in rents is expected to continue in the foreseeable future, primarily propelled by limited land availability, high land costs and heightened investments from institutional investors and developers.

Outlook: Warehousing market to remain upbeat on demand momentum

• The Bengaluru warehousing stock is expected to cross 80 mn sq ft by the end of 2026, 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, which are expected to enhance connectivity between Bengaluru & other regions in the West and East of India.