Mumbai emerged as India's top industrial and warehousing market in the first half of the 2026, with leasing volumes surging 44% year-on-year to 10.7 million square feet, according to a Knight Frank report.
The city accounted for nearly 29% of the total 36.8 million sq ft leased across India's eight major industrial and warehousing markets during the period, up from 23% a year earlier.
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Overall leasing across the eight markets grew 15% year-on-year in H1 2026, signalling resilient demand despite disruptions to global supply chains.
Knight Frank attributed Mumbai's strong performance partly to the completion of the Western Dedicated Freight Corridor in March, which improved freight connectivity between Jawaharlal Nehru Port Trust (JNPT), Gujarat, Maharashtra and the National Capital Region.
Mumbai's relatively low availability of Grade A warehouse space also supported demand, particularly from occupiers seeking large-scale facilities.
Manufacturing companies and third-party logistics (3PL) operators emerged as key drivers of leasing activity.
The National Capital Region (NCR) remained the second-largest market, with leasing rising 17% year-on-year to 5.9 million sq ft. Bengaluru recorded a 36% increase to 4 million sq ft, while Ahmedabad saw leasing rise 15% to 4.1 million sq ft.
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Kolkata registered the sharpest percentage increase, with leasing jumping 69% to 2.4 million sq ft. Pune, Chennai and Hyderabad, however, recorded declines of 12%, 27% and 10%, respectively.
Manufacturing remained the largest demand driver, accounting for 46% of total leasing, or 17 million sq ft, up 17% from a year earlier.
The 3PL sector also strengthened its position, with its share of total leasing rising to 30% from 27%. Leasing by 3PL operators increased 27% to 11.1 million sq ft.
Retail leasing surged 70% year-on-year as hypermarkets and organised grocery chains expanded their distribution networks.
E-commerce, by contrast, recorded a 44% decline as major platforms shifted towards consolidating distribution networks following years of rapid capacity expansion.
On the supply side, total industrial and warehousing stock across the eight markets increased 14% year-on-year to 584.9 million sq ft. Despite the rise in supply, vacancy declined to 11.4% from 12.1%, indicating that demand continued to absorb space at a faster pace than new supply was added.
Mumbai accounted for 192.1 million sq ft, or 33%, of the total stock across the eight markets.
However, its vacancy rate stood at 15.3%. Grade A facilities made up only 35% of Mumbai's warehouse stock, one of the lowest proportions among the major markets.
Warehouse rents increased across all eight markets. In Mumbai, rents rose 5% annually to Rs 26 per sq ft per month, while Pune remained the most expensive market at Rs 28.7 per sq ft per month.
Nationally, Grade A facilities accounted for 47% of total industrial and warehousing stock. Knight Frank said the trend reflected growing occupier preference for modern, compliant and technology-enabled facilities as logistics and supply-chain requirements evolve.
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