Furthermore, there is a boom in new projects on the market that tout superior specs and excellent environmental, health, and safety (EHS) regulations. In recent years, this tendency has caused the percentage of grade-A supplies in cities to steadily rise. Grade A space represented for 52% of the market’s total supply and absorption in Q1 2023, demonstrating the substantial demand for high-quality space.
Delhi-NCR, Mumbai, Bengaluru, Chennai, and Pune have consistently made the largest contributions to India’s industrial and warehousing segment absorption throughout time. With the highest absorption rate of 19% in Q1 2023, Delhi-NCR continued to lead, closely followed by Mumbai with 14%. The absorption rates in Bengaluru and Chennai were 9% and 8%, respectively. Twenty-three percent of the total absorption was shared between Tier II and Tier III cities.
“By 2023, there will likely be a major increase in the industrial and logistics sector, with over 40 million square feet estimated to be absorbed. Emerging Tier II and Tier III cities, an increase in the demand for urban warehousing, and a significant shift in the Indian manufacturing industry are all predicted to contribute to this demand. The Performance Linked Incentives (PLIs) and effective multimodal connectivity strategies created for local and international distribution objectives further encourage the change. Managing Director of Industrial and Logistics at Savills India, Srinivas N, said.