According to a report by Savills India, the total absorption of the industrial and warehousing sector reached 22.4 million square feet (msf) in the first half (H1) of 2022, witnessing a surge of 7% as compared to 20.9 msf in H1 2022.
According to the report, Tier I cities contributed 75% of the total absorption in the first half of 2023, while Tier II and III cities contributed the remaining 25%. The absorption in Tier II and III cities increased by 22% annually, rising from 4.1 msf in the first half of 2022 to 5.0 msf in the first half of 2023.
Mumbai emerged as the top city in the nation among Tier I cities, with the greatest absorption of 18%. Delhi-NCR came in second with 14%, and Pune came in third with 10%. Chennai and Bengaluru both witnessed 9% absorption.
Grade A space made up 53% of the total absorption in the country in H1 2023, a significant rise from 36% in the first half of 2022 due to a greater focus on quality and compliance. During the same time, the industrial and warehouse sector saw a new supply of 27.4 msf, a 36% increase over the 20.2 msf seen the previous year.
As per the report, the third-party logistics (3PL) sector, which accounts for between 40% and 50% of total demand, has significantly influenced demand. Due to increased activity supported by numerous incentive programs, the manufacturing sector has also picked up speed.
