In the year 2023, Savills India reported a significant upswing in the industrial and logistics sector, with absorption reaching 49.4 million sq ft—an impressive 6.7% growth compared to 2022’s absorption of 46.3 million sq ft. Notably, Tier-I cities accounted for 75% of this absorption trend, with Tier II and III cities contributing the remaining 25%. The emergence of these latter cities as vital sourcing hubs has notably improved distribution efficiency. The heightened demand in manufacturing and retail, coupled with sustained requirements from the 3PL sector, has been the driving force behind this absorption trend.
Mr. Srinivas N, the Managing Director of Industrial and Logistics at Savills India, emphasized the sector’s growth trajectory. He attributed this trajectory to the increasing domestic demand and the expanding distribution networks in Tier II and III cities. Projections for 2024 are optimistic, foreseeing absorption exceeding 56 million sq ft, marking a growth rate surpassing 13%. Concurrently, the supply is anticipated to surpass 71 million sq ft, showcasing a growth rate exceeding 14%.
These encouraging indicators highlight the sector’s resilience and its pivotal role in addressing the evolving demands of the manufacturing and retail landscape.
