Dedicated locality research platform
Dedicated locality research platform
Enter your email address and you will receive
a link to reset your password
In Q3 2023, India's industrial and logistics sector experienced substantial growth, marked by the absorption of 11.4 million sq. ft. Notably, 78% of this absorption occurred in tier I cities, with the remaining 22% in tier II and III cities. The surge in demand emanated from the manufacturing and retail sectors, coupled with sustained 3PL sector activity, according to a report by Savills India, an international real estate advisory firm. During the same quarter, the sector saw a fresh supply of 17.8 million sq. ft., with tier I cities contributing 79% (14.1 million sq. ft.) and tier II and III cities contributing 21% (3.7 million sq. ft.). This increased supply was attributed to major developers delivering projects in response to the growing demand. Grade A spaces accounted for 54% of the overall supply and 52% of the absorption in Q3 2023. Notably, in tier I cities, grade A spaces constituted 62% of the supply and 54% of the absorption, underscoring a significant shift toward graded and compliant buildings. The emphasis on Environmental, Health, and Safety (EHS) standards contributed to heightened demand for quality-compliant spaces. This trend is anticipated to lead to a transition from C and D grade spaces to grade A across the country in the coming years. The manufacturing sector played a key role, accounting for 33% of the total absorption in Q3 2023, driven by increased activity and various incentive schemes. This upward trajectory is expected to persist, with a projected contribution of over 30% to total absorption in the next two years as well. Following closely, the 3PL sector contributed 32% to total absorption in the same quarter. Other sectors contributing to demand included retail at 16% and FMCD/FMCG at 5%, while various segments, including cold storage, chemical storage, FTWZs, ICDs, and Urban Warehousing, collectively contributed around 11%. In terms of geographical distribution, Delhi-NCR claimed the top spot, contributing 31% to total supply, closely followed by Mumbai at 12%. Chennai and Bengaluru contributed 8% and 7%, respectively, to total supply. Tier II and III cities together accounted for 21% of the total supply. Regarding absorption, Delhi-NCR and Pune each held the highest contribution at 14%, trailed by Mumbai at 12%, and Bengaluru and Chennai, each at 11%, showcasing the dynamic landscape of the industrial and logistics sector in Q3 2023.
Propscience is India’s dedicated property news portal. We cover the latest events, news, trends, deals, new launches and more.
All our services and tools are completely free of cost and available 24X7!
