Demand for Industrial and Warehousing Spaces Up 23% in Jan-Mar Across Top 19 Cities: Study


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    Industrial and warehousing space leasing saw a 23% annual increase in January-March this year, reaching 135 lakh square feet across 19 major cities in India. This surge was driven by demand from third-party logistics companies and manufacturers, as reported by Savills India.

    The year kicked off with robust absorption, with 13.5 million (135 lakh) square feet leased in January-March 2024, compared to 11 million (110 lakh) square feet in the same period last year.

    Of the total absorption, 78% was in tier I cities, with the remaining 22% in tier II and III cities. Tier I cities, including Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, Mumbai, Delhi-NCR, and Pune, saw a 25% increase in leasing, while tier II and III cities, such as Guwahati, Bhubaneshwar, Patna, and others, witnessed a 20% growth.

    Delhi-NCR led in absorption, contributing 21% in January-March 2024, followed by Pune and Bengaluru at 12% each. The contribution of Pune increased from 7% in Q1 2023 to 12% in Q1 2024, while it decreased for Mumbai from 14% to 7%.

    Srinivas N, Managing Director of Industrial and Logistics at Savills India, attributed the trend to the growing supply chain outsourcing, leading to increased expansion of third-party logistics players in tier II and III cities. He also highlighted the manufacturing sector’s significant role, accounting for over 25% of total absorption.

    Additionally, the e-commerce sector is expected to drive further activity, especially in urban distribution and extending reach to tier II and III cities, making them key hubs for sourcing, consumption, and distribution.

    MetricJanuary-March 2024 (in lakh square feet)Year-on-Year Growth (%)
    Total Leased Space13523
    Tier I Cities Leased Space10525
    Tier II and III Cities Leased Space3020
    Top Contributing Cities (% of Total)

    Also read: Insights on India’s Commercial Real Estate Landscape

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