Warehousing Investments Rise 53% in H1 2026 as Demand for Industrial Space Stays Strong

India’s warehousing and industrial real estate sector continued its growth journey in the first half of 2026, with both leasing activity and institutional investments recording healthy gains. According to a recent report by Vestian, institutional investments in the sector increased by 53% year-on-year to USD 49 million, while leasing of warehousing and industrial space rose 16% across the country’s seven major cities.

The report highlights that businesses continue to expand their logistics and manufacturing operations despite global economic uncertainties. Companies leased around 22 million sq. ft. of warehousing and industrial space between January and June 2026, reflecting sustained demand for high-quality logistics facilities.

The strongest demand came from third-party logistics (3PL) providers, consumer goods companies, and engineering and manufacturing firms. These sectors are expanding their supply chains to meet growing domestic demand and improve delivery efficiency. As India’s manufacturing base grows and online shopping continues to expand, businesses are investing in larger and more modern warehouses.

The report also points to a major shift in the type of warehouses businesses now prefer. Companies are increasingly looking for Grade A green warehouses that offer better energy efficiency, modern infrastructure and environmentally friendly operations. Sustainability is becoming an important factor for occupiers as businesses work towards meeting their environmental, social and governance (ESG) goals.

Government investments in roads, expressways, freight corridors and logistics infrastructure are also supporting the sector’s growth. Better connectivity between manufacturing centres, ports and consumption markets is making it easier for companies to move goods across the country, increasing the need for strategically located warehouse facilities.

Although institutional investments remain a relatively small share of total real estate investments, the increase in funding signals growing confidence among investors. Experts believe the sector offers long-term opportunities as India’s economy continues to expand and supply chains become more organised.

Industry experts expect leasing activity and investments to remain strong during the second half of 2026. Growth in e-commerce, manufacturing, consumer spending and infrastructure development is likely to create further demand for modern industrial and warehousing space across key markets.

For developers and investors, the trend reflects a structural shift rather than short-term growth. Modern logistics facilities are becoming an essential part of India’s economic development, supporting manufacturing, exports, retail and faster delivery networks. As demand for organised warehousing continues to increase, the sector is expected to play an even bigger role in the country’s infrastructure landscape over the coming years.