High-activity clusters drive ~75% of India's industrial & warehousing demand & new supply in last 5 years. Chennai dominates the list with 3 high-activity clusters, followed by 2 each in Delhi NCR, Pune & Bengaluru

India's industrial & warehousing market has emerged as one of the best-performing real estate asset classes, marked by rising scale and Grade A stock touching ~300 million sq ft - almost twice the inventory levels of 2021. Simultaneously, improving asset quality and traction in institutional investments has been notable in the post-pandemic era. This growth has been primarily driven by 13 high-activity clusters, which together dominate industrial & warehousing activity across a broader universe of 40 clusters in India. These high-activity clusters have been identified based on strong demand-supply fundamentals, each witnessing over 4 million sq ft of cumulative leasing and fresh supply, respectively, since 2021. These 13 clusters collectively account for ~75% of the cumulative demand & new supply each since 2021 and boast around 215 million sq ft of Grade A stock as on date. Interestingly, these high-activity clusters are fairly spread out across major consumption centers with three in Chennai, two each in Delhi NCR, Bengaluru & Pune and one each in Mumbai, Kolkata, Ahmedabad, & Hyderabad.

Industrial & warehousing clusters: A snapshot

High-activity clusters benefiting from infrastructure-led growth

Across India, high-activity clusters have been benefitting from infrastructure-led growth, improved connectivity and logistics linkages, driving scale and attractiveness. Bhiwandi in Mumbai continues to be India's largest industrial & warehousing cluster with about 42 million sq ft of Grade A stock, owing to its proximity to Jawaharlal Nehru Port and seamless access to key arterial corridors such as Mumbai-Ahmedabad & Mumbai-Nashik expressways. Interestingly, Grade A inventory in Bhiwandi alone exceeds the entire warehousing stock of cities like Hyderabad, Ahmedabad, Kolkata, Bengaluru and Pune.

Similarly, warehousing space uptake in Farukh Nagar and NH 48 in Delhi NCR continues to be driven by their proximity to industrial hubs of North India and improvements in connectivity via Western & Eastern Dedicated freight corridors, Kundli-Manesar-Palwal & Delhi-Mumbai Expressways. Flagship infrastructure projects augment the regional distribution capabilities of key industrial & warehousing clusters of Delhi NCR. In South India, key clusters like NH 16, NH 48 & Oragadam in Chennai and Hoskote-Narsapura-Soukya Road in Bengaluru benefit from improved regional linkages via Bengaluru-Chennai Expressway and rising demand from large Third-party logistics (3PL), Engineering, E-commerce and Automobile occupiers. Additionally, the presence of an international sea-port adds to the industrial & warehousing traction seen in high-activity clusters of Chennai.

13 high-activity industrial & warehousing clusters across India's top 8 cities

Bhiwandi drives 3PL Demand; Oragadam & Farukh Nagar lead Engineering and E-Commerce

Third-party logistics (3PL) followed by the Engineering and E-commerce segments, continue to drive demand in India's Industrial & warehousing market, together accounting for nearly two-thirds of the Grade A space uptake in the last five years. Of the ~60 million sq ft of cumulative leasing by the 3PL segment since 2021, Bhiwandi in Mumbai has emerged as the most prominent cluster, accounting for over one-fifth of the segment's demand, followed by Farukh Nagar (Delhi NCR) and NH 16 (Chennai). This underscores the criticality of well-connected logistics hubs in supporting large-scale 3PL requirements.

In the Engineering segment, demand is largely driven by manufacturing-led clusters, with Oragadam & NH 48 in Chennai each accounting 13-14% of the segment's space uptake in the last five years, followed by Chakan in Pune. Meanwhile, leasing by E-commerce firms has been concentrated in Farukh Nagar and Bhiwandi, with these clusters cumulatively accounting for over one-fourth of the segment's overall demand. In the case of the Automobile & Retail segments, Chakan in Pune and Hoskote-Narsapura-Soukya Road in Bengaluru have dominated leasing significantly. Interestingly, Farukh Nagar & Bhiwandi feature amongst the top three clusters across multiple demand segments such as 3PL, E-commerce, Electronics, FMCG and Retail, reinforcing their position as leading warehousing hubs of the country.

Top clusters across demand segments (2021-Q1 2026)

Average rentals likely to firm up by 5-10% YoY across key clusters

Rental growth has been pronounced across most high-activity clusters, with around 15-35% increase in average rentals over the last five years. In fact, prominent clusters in Delhi NCR, such as Farukh Nagar & NH 48, have seen close to 30% growth in average rentals over the last five years, supported by occupier expansion across key demand segments. In the coming years, rentals are expected to firm up by 5-10% on a YoY basis across most high-activity clusters, driven by growing preference for institutional-grade assets and ongoing infrastructure developments.

High-activity clusters set to command 70-80% of demand in coming years

With existing high-activity clusters expected to scale further, India is likely to strengthen its position as a notable industrial & warehousing market in the wider APAC region. Looking ahead, while these high-activity clusters are likely to continue commanding 70-80% of India's Grade A industrial & warehousing demand and supply additions each, the volume of transactions in emerging and nascent clusters is set to grow at a much faster pace amidst ongoing structural shifts and growing influx of Grade A assets in the relatively emerging markets. Supported by continued government impetus on manufacturing and logistics, emerging Tier II markets such as Bhopal, Bhubaneswar, Coimbatore, Indore, Jaipur, Surat, Visakhapatnam, etc., are poised for heightened traction. These locations will increasingly play a pivotal role and act as critical supply-chain nodes supported by E-commerce expansion and export-oriented growth.