Leasing of industrial and warehousing space rose 7 percent during January-June to 22.4 million square feet across tier I-III cities mainly on better demand from third-party logistics players and manufacturing units, according to property consultant Savills India.
The absorption of industrial and warehousing space stood at 20.9 million square feet in the same period last year.
Tier I cities accounted for 75 percent of the total absorption in the first half of 2023, while tier II and III contributed the remaining 25 percent, the consultant highlighted.
Tier I includes cities like Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, Delhi-NCR, and Pune.
Tier II and Tier III cities include Guwahati, Bhubaneshwar, Patna, Hosur, Coimbatore, Rajpura, Lucknow, Jaipur, Nagpur, Indore, and Surat.
As per the data, the leasing in Tier I cities rose 4 percent to 17.4 million square feet during January-June from 16.8 million square feet in the year-ago period. In tier II and III cities, the absorption increased 22 percent to 5 million square feet from 4.1 million square feet.
The demand for grade A warehousing and ready fitted-out factory space has seen a substantial surge in recent years, the consultant said.
In the first half of 2023, grade A space accounted for 53 percent of the total absorption in the country, marking a significant increase from 36 percent in the first half of 2022.
During the first half of 2023, the 3PL (third-party logistics) sector continued to drive warehousing demand, accounting for 44 percent of the total absorption, a notable increase from 37 percent in H1 2022.
The manufacturing sector followed at 22 percent, while the retail sector accounted for 13 percent, and the FMCG/FMCD sector accounted for 6 percent.
Savills also reported that the new supply of industrial and warehousing space rose 36 percent to 27.4 million square feet during the first half of this year from 20.2 million square feet in the year-ago period.
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