Strong demand growth of 65% y-o-y with 9.1 mn sq ft of net absorption in 2025

• Net absorption hit 9.1 mn sq ft in 2025, a strong 65% y-o-y growth. Hoskote-Devanahalli cluster had the largest share with proximity to the international airport & city centre, followed by Hosur Road-Hosur City with its access to the established industrial ecosystem.
• Rising demand for high-quality, compliant spaces with Grade A warehouses accounted for 73% of the net demand. The major demand drivers are consumption-led sectors including E-Commerce and Retail (>30% demand share), followed by Engineering and 3PL companies.

Grade A projects contribute 75% of the new supply for 2025

• Bengaluru witnessed new supply of 9.5 mn sq ft in 2025, of which ~75% was of Grade A specifications. There is a rising activity from institutional investors leading to a growing presence of Grade A projects in the market.
• Grade A vacancy has remained consistently low with a marginal increase of 20 bps y-o-y reaching 3.9% in 2025. This continues to indicate the rising demand from consumption-led and manufacturing sectors for Grade A spaces with higher specifications.

Growing demand for Grade A space supports 4.6% y-o-y rental appreciation

• Rents have risen 4.6% y-o-y driven by increasing demand for Grade A spaces, rising institutional investments in the market and growing land prices. Hoskote-Devanahalli and Hosur Road-Hosur City have recorded higher rent growth, being the most in-demand clusters.
• The upward trend in rents is expected to continue in the foreseeable future, primarily propelled by heightened investments from institutional investors and developers as well as growing demand for Grade A spaces.

Outlook: Bengaluru warehousing market poised for growth; stock projected to reach 80 mn sq ft by 2026

• Bengaluru’s warehousing market is set for growth in 2026 with total stock expected to cross 80 mn sq ft, driven by increasing Grade A spaces and supported by key institutional investments. Hoskote-Devanahalli cluster is anticipated to maintain its position as a hotspot.
• Infrastructure projects such as BMIC and CBIC industrial corridors are driving Bengaluru warehousing demand by enhancing connectivity to Western and Eastern India. With rising demand, vacancy rates are likely to hover below 10% over the next four years.