Mumbai leads warehousing absorption in Q1 2026 with 42 per cent share

Mumbai dominated Indiarsquos warehousing market in Q1 2026 accounting for a 42 per cent share as total absorption touched 114 million sq ft While western markets drove growth investment inflows dropped sharply even as the longterm outlook remained positive ANI reportedAbsorption rises quarterly dips annuallyAccording to the latest sector review report by Vestian the industry recorded total absorption of 114 million sq ft during the first quarter of the year ldquoWhile absorption increased by 8 per cent over the previous quarter it declined by 14 per cent yearonyearrdquo the report saidWestern markets drive majority shareGrowth remains heavily concentrated in western markets with Mumbai and Pune together accounting for 81 per cent of panIndia absorption the news agency reportedAs per the report Punersquos market share surged to 39 per cent in Q1 2026 up from 16 per cent in the previous quarter This marks the cityrsquos highestever quarterly contribution driven by the closure of several largescale transactionsBhiwandi emerges as key growth hubIn Mumbai the Bhiwandi micromarket remains the primary growth driver contributing 69 per cent of the cityrsquos total absorption and 30 per cent of the countryrsquos overall leasing volumeRecovery signals improving occupier confidenceldquoFollowing a sharp 58 per cent quarterly decline in Q2 2025 absorption has shown a gradual recovery in subsequent quarters This steady upward trajectory indicates improving occupier confidence largely driven by demand from 3PL engineering and manufacturing and consumer goods and services sectorsrdquo the report statedRental values remain stable across citiesThe rental landscape across the top seven cities remains largely stable with weighted average rentals ranging between Rs 20 and Rs 29 per sq ft per month Chennai recorded the highest rental at Rs 29 per sq ft per month after a sharp 22 per cent quarterly increase marking the strongest growth among leading citiesNCR Kolkata see slowdown in activityConversely regions such as the National Capital Region NCR and Kolkata saw a significant drop in activity NCRrsquos share of absorption fell to 6 per cent from 17 per cent in the previous quarter while Kolkatarsquos leasing volume dropped to negligible levels following the completion of major deals in earlier monthsInvestment inflows see sharp declineldquoInstitutional investments may witness a gradual recovery after the temporary slowdown in Q1 2026 as investors continue to focus on incomegenerating logistics parks and strategically located warehousing assets with strong tenant covenantsrdquo the report addedThe investment climate cooled significantly during the quarter with the sector attracting only USD 22 million in institutional capital marking a 96 per cent decline compared to the end of 2025Longterm outlook remains positiveDespite this slowdown the longterm outlook remains positive supported by government initiatives such as PM Gati Shakti and the National Logistics PolicyThe report stated ldquoOverall the outlook for the warehousing and logistics sector remains positive backed by policy support technology adoption ecommerce penetration manufacturing expansion and the growing need for efficient nationwide supply chain networksrdquoWith ANI inputs