India’s logistics real estate sector continued to strengthen in the first half of 2026, with Mumbai, Delhi-NCR and Bengaluru emerging among the top Asia-Pacific (APAC) markets for logistics rental growth, according to a report by Knight Frank.
The growth has been supported by sustained manufacturing activity, rising domestic consumption and ongoing supply-chain diversification, which are driving demand for modern and strategically located warehousing facilities.
Mumbai recorded the highest rental growth among the three Indian markets during H1 2026, with rents increasing 4.4% year-on-year. Prime logistics rents in the city stood at Rs 26 per sq ft per month, while vacancy declined to 13.5%. The market remained balanced, with the 12-month rental outlook pointing towards further growth.
Delhi-NCR recorded 2.8% rental growth during the first half of the year. Prime rents stood at Rs 22.30 per sq ft per month, while vacancy fell to 14.7%. Knight Frank classified the market as balanced and expects rental growth to continue over the next 12 months.
In Bengaluru, logistics rents increased 2.2% in H1 2026, with prime rents reaching Rs 23.50 per sq ft per month. Vacancy stood at 17.6%, while the market remained balanced and the rental outlook was positive.
The three Indian cities featured among the top 10 APAC markets for annual logistics rental growth during the period.
According to Knight Frank, logistics occupiers across Asia-Pacific are becoming increasingly selective, with greater emphasis on connectivity, operational efficiency and the quality of warehouse assets.
“India’s logistics sector continues to demonstrate strong structural resilience, supported by sustained manufacturing activity, domestic consumption and the ongoing diversification of supply chains,” said Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India, according to ANI.
Baijal added that healthy rental growth in Mumbai, Delhi-NCR and Bengaluru reflects sustained occupier demand, while companies are increasingly prioritising location, connectivity and asset quality when selecting logistics facilities.
Flight to quality gains momentum
The broader APAC logistics market is also witnessing a shift in occupier behaviour. Leasing activity is increasingly being driven by relocations, consolidation and upgrades, as companies look to improve operational efficiency and strengthen network performance.
This trend is contributing to a growing “flight-to-quality”, with occupiers showing a stronger preference for modern warehouses equipped with better functionality, technology integration and sustainability features.
Across the 18 APAC markets tracked by Knight Frank, 15 recorded stable or higher rents in H1 2026. However, the consultancy expects rental conditions across the region to remain broadly stable in the second half of the year, with rental growth likely to remain below 2%.
India, meanwhile, is expected to maintain its positive momentum over the near to medium term, supported by continued manufacturing investments and the diversification of supply chains.
