Industrial and Warehousing Sector Absorbs Over 46 Million Sq. Ft of Space in 2022

 

The Indian industrial and warehousing sector has seen an impressive year in 2022, with over 46 million square feet of space absorbed. This figure is a testament to the growth of the sector and the increasing demand for industrial and warehousing spaces across the country.

The strong performance of the sector can be attributed to several factors. The rise of e-commerce and the growth of the manufacturing industry has led to an increased demand for industrial and warehousing spaces. Additionally, the government's focus on initiatives such as Make in India and Atmanirbhar Bharat has further boosted the manufacturing industry and subsequently, the demand for industrial and warehousing spaces.

The cities of Mumbai, Pune, Bangalore, and Chennai have emerged as key markets for industrial and warehousing spaces, with these cities accounting for a significant proportion of the total space absorbed in 2022. This can be attributed to their strategic location, robust infrastructure, and access to a large pool of skilled labor.

The outlook for the Indian industrial and warehousing sector remains positive, with increasing demand and strong government support expected to drive growth in the coming years. The sector is expected to witness continued investment, particularly in the form of large-scale developments and modernization of existing facilities, further fueling its growth.

Investor interest in the industrial and logistics sector remains strong, despite some financial impact in the second and early third quarters of the year due to rising construction costs, geopolitical issues like the Russia-Ukraine conflict, and increased interest rates. However, the industry quickly returned to normal as input costs stabilized and developers adapted to changing conditions.

In 2022, the warehousing sector raised $1.5 billion in private equity, and we anticipate that investor interest in this sector will continue to grow in 2023 due to increasing domestic demand and expansion of distribution networks in tier II and tier III cities.

Since the implementation of the PLI (Performance Linked Incentive) scheme, manufacturing has emerged as a high-growth sector in India, with major multinational companies announcing investment plans in the country. As a result, we expect to see an increase in the supply of manufacturing space with improved specifications to meet the needs of manufacturing occupiers. 

-------

This article is based on the report/press release by Savills India. (Source)