Consistent demand in H1 2026 with 3.7 mn sq ft of net absorption

• NCR Delhi demonstrated resilient demand in H1 2026, recording net absorption of 3.7 mn sq ft. While global geopolitical issues have impacted market, resulting in a 10% y-o-y decline in net absorption for H1, the impact is anticipated to be temporary.
• Delhi-NH8 and Ghaziabad-Noida clusters led net absorption, leveraging their strategic location along the Western and Eastern Dedicated Freight Corridors. By segments, 3PL dominated the space take-up, followed by manufacturing and consumer-led sectors.

New supply up 18.4% y-o-y in H1 2026 with rising traction from institutional investors

• New supply rose 18.4% y-o-y in H1 2026 to 5.8 mn sq ft, with the Delhi-NH8 cluster leading the completions due to land availability, followed by Ghaziabad-Noida and Sonipat-Hassangarh clusters, strengthening the region’s logistics infrastructure capacity.
• Vacancy rose from 19.5% in 2025 to 20.4% in H1 2026 due to speculative supply outpacing demand. However, these spaces are expected to be absorbed in the coming quarters as demand for quality logistics facilities continues to strengthen.

Market fundamentals drive rents and asset value appreciation

• The rents have grown by ~2% y-o-y in the market reaching INR 23.2 per sq ft per month. With strengthening demand for quality warehousing spaces and growing institutional investor interest, rental growth of 4-5% is anticipated in upcoming quarters.
• Land prices have risen, pushing up capital values by by 3.1% y-o-y in H1 2026, resulting in market yields compressing by 10 bps to 7.7%. This is indicative of the strengthening asset valuations and investor confidence in the logistics sector.

Outlook: Warehousing stock in NCR Delhi projected to cross 120 mn sq ft by end of 2026

• NCR Delhi’s warehousing stock is projected to cross 120 mn sq ft by the end of 2026, primarily driven by Grade A projects coming on-stream and backed by institutional investments. The Delhi-NH8 cluster will maintain its high level of activity, benefitting from the WDFC.
• Infrastructure projects including DMIC, WDFC, and EDFC are enhancing connectivity between Delhi and Western/Eastern India, driving warehousing demand. Combined with e-commerce and 3PL growth, vacancy is forecast to remain below 15% through 2030.