Net absorption increased by 52% y-o-y in YTD Q3 2025 to 8.1 mn sq ft

• As of YTD 2025, the market saw net absorption reaching 8.1 mn sq ft, a 52% increase compared to the previous year. Among the submarkets, Hoskote-Devanahalli had the largest share, followed by Hosur Road – Hosur City.
• Engineering and FMCG drove 55% of quarterly demand, with 3PL/Logistics, Home & Construction, and Retail also contributing significantly. Occupiers are increasingly seek high-quality, compliant spaces, boosting demand for Grade A warehouses across the market.

Over 90% of new Grade A supply is in institutionally backed projects

• For YTD 2025, the market has witnessed new supply addition of 8.2 mn sq ft, with 77% being Grade A quality amid increasing traction from institutional developers and investors.
• The vacancy decreased by 60 bps y-o-y to reach 9.9%. Notably, the vacancy of prime grade A spaces is considerably low at 3.2% as of Q3 2025.

Increase in demand of prime Grade A spaces has resulted in 5.5% y-o-y rental appreciation

• The Grade A rents have risen by 5.5% y-o-y on the back of increased demand, increased traction from institutional developers/ investors and an increase in land rates.
• The 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, etc.

Outlook: Proposed infrastructure projects likely to drive upcoming warehousing demand

• Bengaluru’s warehousing sector is eyeing year-end stock to hit 70 mn sq ft, driven by new supply being completed by key institutional developers such as Indospace, Ascendas, Prologis, etc. Hoskote-Devanahalli remains a key hotspot with strong supply-demand.
• Bengaluru warehousing demand is likely to get a boost from infrastructure projects like BMIC and CBIC corridors, that will improve connectivity to West & East regions of India. Strong demand fundamentals are likely to keep vacancy under 8% over the next 4 years.