Bengaluru warehousing stock set to cross 80msq ft by 2026

The pipeline is dominated by Grade A spaces.

Bengaluru’s Grade A and Grade B warehousing and light manufacturing market closed 2025 on a robust note, with total net absorption reaching 9.1 million sq ft, marking a sharp 65% year-on-year growth, according to a report by JLL. The strong full-year performance underscores the city’s growing prominence as a consumption and manufacturing hub, supported by rising institutional participation and expanding Grade A stock.

As per JLL’s findings, the surge in demand was largely led by consumption-driven sectors. E-commerce and retail together accounted for over 30% of the overall demand share in 2025, followed by engineering companies and third-party logistics (3PL) players. The report highlights that occupiers are increasingly prioritising high-quality, compliant facilities, with Grade A warehouses contributing 73% of the total net absorption during the year.

Cluster-level performance reflects this shift towards quality and connectivity. The Hoskote-Devanahalli cluster emerged as the frontrunner, benefiting from its proximity to Kempegowda International Airport and improved access to the city centre. Hosur Road–Hosur City followed closely, leveraging its connectivity to an established industrial ecosystem. JLL notes that these micro-markets have become preferred destinations for both occupiers and developers seeking scale and efficiency.

On the supply side, Bengaluru recorded 9.5 million sq ft of new completions in 2025, with approximately 75% comprising Grade A specifications, according to JLL. The consultancy attributes this strong pipeline to increasing activity from institutional investors, whose participation has significantly enhanced the quality and scale of developments across the city. The rising institutional footprint has also contributed to a structural shift in market standards, with developers focusing on compliance, higher technical specifications and future-ready infrastructure.

Despite the influx of new supply, Grade A vacancy levels have remained consistently tight. JLL reports that vacancy in Grade A assets saw only a marginal 20 basis points year-on-year increase, reaching 3.9% in 2025. This sustained low vacancy, the report notes, reflects resilient demand from both consumption-led sectors and manufacturing occupiers seeking modern facilities.

Rental values have responded accordingly. According to JLL, average rents rose 4.6% year-on-year, supported by strong Grade A demand, growing institutional investments and escalating land prices. The most pronounced rental growth was recorded in the Hoskote-Devanahalli and Hosur Road–Hosur City clusters, which continue to see heightened occupier interest. JLL expects the upward rental trajectory to persist in the foreseeable future, driven by sustained capital inflows and steady demand for premium warehousing space.

Looking ahead, JLL projects that Bengaluru’s total warehousing stock is set to cross 80 million sq ft by 2026. The consultancy expects growth to be underpinned by continued expansion of Grade A developments and key institutional investments. Infrastructure initiatives, including the Bengaluru–Mumbai Industrial Corridor (BMIC) and the Chennai–Bengaluru Industrial Corridor (CBIC), are further strengthening the city’s logistics backbone by enhancing connectivity to western and eastern India.

With rising demand and disciplined supply, JLL anticipates that overall vacancy rates are likely to remain below 10% over the next four years, positioning Bengaluru as one of India’s most resilient and investment-attractive warehousing markets.