Pune warehouse rents rose 6% during Jan-March quarter on demand from manufacturing

Pune: Average warehouse rents in Pune rose by 6% between Jan and March, driven by strong demand from the manufacturing sector. During the period, average rental values stood at Rs 28.5 per sqft, Knight Frank India data showed.

A significant portion of warehouse leasing activity in Pune is concentrated in Chakan and Talegaon, which serve as key hubs for the automobile industry. The city accounted for 13% of overall manufacturing leasing volumes in the quarter, largely led by occupiers from the automotive and engineering sectors, the data revealed.

Srinivas N, managing director, industrial and logistics at Savills India, said 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.

Warehouse transaction volumes in Pune dropped to 20 lakh sqft in Q1 2026, compared to 29 lakh sqft in the same period last year, primarily due to limited supply. This supply constraint also contributed to the increase in rental values. A similar trend was observed in Chennai, where transactions dropped to 9 lakh sqft from 29 lakh sqft a year ago, while rentals rose 7% to Rs 25.6 per sqft, the data showed.

In Pune, rental growth was further supported by the increasing availability of premium and Grade A warehouse developments.

According to the data, across the top eight metro cities, total warehouse leasing rose to 1.93 crore sqft in Q1 of 2026, up from 1.67 crore sqft a year earlier. Manufacturing remained the primary demand driver, followed by logistics firms as companies continue to optimise costs.

Shishir Baijal, chairman and managing director of Knight Frank India, said 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.