The industrial and logistics sector in India experienced significant growth in the first quarter of 2024, according to a report by Savills India. There was a notable increase in demand compared to the same period last year. Major cities, categorized as Tier I cities, saw the highest demand, while Tier II and III cities also contributed to the growth. The surge in demand was driven by sustained interest from the third-party logistics (3PL) and manufacturing sectors, along with increased activity in the fast-moving consumer goods (FMCG) segment.
Fresh supply of industrial and logistics space also saw an uptick during this period. Delhi-NCR led the way in terms of supply contribution, followed closely by Bengaluru and Kolkata. In terms of absorption, Delhi-NCR remained the top performer, with Pune and Bengaluru following closely behind. Notably, Pune’s share in overall absorption showed a significant increase compared to the previous year.
Grade A space, known for its quality and amenities, played a substantial role in both supply and absorption, reflecting the growing preference for environmentally sustainable options among occupiers.
The demand composition remained consistent, with 3PL being the largest contributor to overall absorption. The manufacturing sector also played a significant role, supported by government incentive schemes.
Looking ahead, the e-commerce sector is expected to further drive growth in urban distribution, particularly in Tier II and III cities, as it expands its reach to meet evolving consumer needs.
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