In India, the area of Industrial & logistics sector saw an assimilation of 13.5 million square. feet. in Q1 2024 contrasted with 11.0 million sq. ft. in Q1 2023 which addresses 22.7% Y-o-Y development.
Tier 1 cities saw 78 percent of the absorption, while level II and III Tier cities represented the leftover 22 percent, a report by Savills India has shown.
During Q1 2024, the general absorption is driven by supported market demand from the 3PL – Third party logistics and assembling areas as well as an upsurge in demand from the FMCG – Fast moving consumer goods area.
Likewise, the take-up of logistics, warehouses & centers has fundamentally added to the overall absorption, the report said.
The report proposes that the logistics area saw a new supply of 12.9 mn sq. ft. in Q1 2024, showing a 4 percent development rate from Q1 2023 levels, of which 9.8 mn sq. ft. (76 percent) was from Tier I cities and 3.1 mn sq. ft. (24 percent) from Tier II & III cities.
In Q1 2024, Delhi-NCR stayed at the top with the highest commitment of 23 percent to add up to supply, firmly followed by Bengaluru & Kolkata with 12 percent and 10 percent separately. The Tier II and Tier III cities together represented 24 percent of the complete stock, the report showed. As far as retention, Delhi-NCR stood out with the most elevated commitment of 21 percent in Q1 2024, trailed by Pune & Bengaluru, each at 12 percent.
The contribution of Pune to the overall absorption expanded from 7 percent in Q1 2023 to 12 percent in Q1 2024, while it diminished for Mumbai from 14 percent in Q1 2023 to 7 percent in Q1 2024, the report showed. Tier I urban cities canvassed in the report included Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, Delhi-NCR, and Pune. Tier II and Tier III urban areas incorporate Guwahati, Bhubaneshwar, Patna, Hosur, Coimbatore, Rajpura, Lucknow, Jaipur, Nagpur, Surat and Indore.
Expressing his views, Srinivas N, Managing Director, Industrial & Logistics, Savills India says, “The growing trend of supply chain outsourcing has resulted in increased expansion of 3PL players in tier II and III cities, leading to higher demand for warehousing space. Manufacturing sector continues to account for over 25% of the total absorption, with improved manufacturing activities likely to drive increased uptake of manufacturing warehouses as well”.
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