Demand for Industrial, Warehousing Spaces Hit Record of 645 Lakh sq ft in 2024: Savills India

The demand for industrial and warehousing spaces reached an all-time high in 2024 at 645 lakh square feet across major cities, driven by third-party logistics companies, e-commerce players and manufacturing firms, among others, according to Savills India.

Real estate consultant Savills India said the absorption or leasing of industrial and warehousing spaces rose by 30 per cent year-on-year to reach 645 lakh square feet in 2024 from 496 lakh square feet in the preceding year.

In Tier-I cities, the leasing rose 34 per cent to 497 lakh square feet from 372 lakh square feet. The absorption of industrial and warehousing spaces increased by 19 per cent to 148 lakh square feet from 124 lakh square feet.

This remarkable growth was driven by sustained demand from the 3PL and manufacturing sectors, along with a significant uptick in interest from the FMCG, FMCD, and e-commerce segments, the consultant said.

Fresh supply jumped 16 per cent to 718 lakh square feet during 2024 from 620 lakh square feet in the preceding year. In tier-I cities, the supply rose 23 per cent to

568 lakh square feet from 462 lakh square feet, but the fresh supply fell 5 per cent in tier-II and III cities to 150 lakh square feet from 158 lakh square feet.

Tier-I cities include Ahmedabad, Bangalore, Chennai, Hyderabad, Kolkata, Mumbai, Delhi-NCR, and Pune.

Tier-II and III cities include Guwahati, Bhubaneshwar, Patna, Hosur, Coimbatore, Rajpura, Lucknow, Jaipur, Nagpur, Surat, Indore, Kochi, Hubli, Vizag, Belgaum and Anantapur.

Srinivas N, Managing Director of Industrial and Logistics, Savills India, said, "We anticipate significant growth in the industrial and logistics sector, driven by increasing demands from the manufacturing sector. Additionally, Tier-II and Tier-III cities are certain to become key hubs for sourcing, consumption, and distribution, supported by substantial growth opportunities".

He expects supply and absorption to surpass 750 lakh square feet in 2025 pan India.

Commenting on the strong performance, Sandeep Chanda, MD of Panattoni India, said, "India's Grade A warehousing market surged exponentially in 2024, driven largely by a surge in demand from the logistics and industrial sectors".

India’s rapid urbanisation, accelerated infrastructure development, and strong economic growth would continue to boost the construction activity in the industrial and logistics sector and supply, he added.

Chanda said this sector will continue to grow in 2025, underlining its critical role in supporting India's economic ambition.