Industrial and warehousing sector rises in Q1

Industrial and warehousing space witnessed absorption of around 11 million square feet in Q1 2023, including 77 per cent from tier I cities and 23 per cent from tier II and III cities.

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Fostered by the Performance Linked Incentives (PLIs) and efficient multi-modal connectivity plans, the Indian manufacturing sector is revamping itself for local and global distribution. Indian market is seeing new projects being delivered with improved specifications and high-quality environmental, health and safety (EHS) standards. Consequently, the demand for industrial and warehousing space in the country is surging. 

Of the total supply of 12.4 million sq ft of industrial and warehousing space, about 9.2 million sq ft, (i.e. 74%) was supplied from tier I cities and 3.2 million sq ft, (i.e. 26%) was supplied from tier II and III cities.  

A report by the real estate advisory firm Savills India said, “Industrial and warehousing space witnessed absorption of around 11 million square feet in Q1 2023, including 77 per cent from tier I cities and 23 per cent from tier II and III cities.” Amongst the Tier-1 cities, Delhi-NCR was at the top, with the highest absorption at 19%. Mumbai followed with 14% absorption. Bengaluru and Chennai logged in absorption at 9% and 8% respectively, the report noted.

The report further stated that sector-wise, the warehousing demand was led by third-party logistics, which accounted for 40% of the total absorption. It was followed by the manufacturing sector which recorded absorption at 23%. Absorption by the Retail sector stood at 11% while 7% absorption was seen by the FMCG sector