Pune witnessed a 6% increase in average warehouse rents during the first quarter of 2026, propelled by robust demand from the manufacturing sector. According to Knight Frank India data, average rental values stood at Rs 28.5 per square foot in the January-March period.
Key Hubs and Sector Demand
A substantial portion of warehouse leasing activity in Pune is concentrated in Chakan and Talegaon, which serve as pivotal hubs for the automobile industry. The city accounted for 13% of overall manufacturing leasing volumes in the quarter, primarily driven by occupiers from the automotive and engineering sectors, the data revealed.
Industry Insights
Srinivas N, managing director of industrial and logistics at Savills India, noted that the sector continued to perform well due to sustained manufacturing demand and ongoing capacity expansions. “Occupiers are increasingly diversifying supply chains, and rising absorption levels highlight the vital role of the warehousing sector in India’s industrial growth,” he said.
Transaction Volumes and Supply Constraints
Warehouse transaction volumes in Pune dropped to 20 lakh square feet in Q1 2026, compared to 29 lakh square feet in the same period last year, primarily due to limited supply. This supply constraint also contributed to the rise in rental values. A similar trend was observed in Chennai, where transactions fell to 9 lakh square feet from 29 lakh square feet a year ago, while rentals increased 7% to Rs 25.6 per square foot, the data showed. In Pune, rental growth was further supported by the increasing availability of premium and Grade A warehouse developments.
National Trends
Across the top eight metro cities, total warehouse leasing rose to 1.93 crore square feet in Q1 2026, up from 1.67 crore square feet a year earlier. Manufacturing remained the primary demand driver, followed by logistics firms as companies continue to optimise costs.
Future Outlook
Shishir Baijal, chairman and managing director of Knight Frank India, said that while demand fundamentals remained strong, the sector’s future growth would depend on the timely development of high-quality supply, especially amid ongoing land and regulatory challenges. A separate report by real estate solutions provider Vestian highlighted that occupiers were increasingly prioritising network efficiency, faster delivery timelines, and technology-enabled warehousing solutions.
