Industrial and warehousing space has witnessed absorption of more than 46 million sq ft in 2022 which includes over 36 million sq ft from Tier-I cities and over 10 million sq ft from Tier-II and Tier-III cities. India witnessed a fresh supply of 47 million sq ft in 2022, of which 34 million sq ft was from Tier-I cities and close to 13 million sq ft from Tier-II and Tier-III cities, as per the latest data from real estate advisory firm, Savills India. The new projects delivered with improved specifications and were of high quality environmental, health and safety (EHS) standards. Among the major cities in India, Delhi NCR led the pack with the highest absorption in 2022 at 16 per cent followed by Mumbai at 14 per cent. Pune and Bengaluru saw absorptions at 13 per cent and 12 per cent respectively, while Tier-II and Tier-III cities accounted for 22% per cent. 3PL and e-commerce sectors continued to drive warehousing demand, together accounting for 52 per cent of the total absorption witnessed in 2022, followed by manufacturing sector at 16 per cent and the retail sector at 13 per cent. Grade A space accounted for 42 per cent of total absorption and 48 per cent of total supply witnessed in 2022. The warehousing sector is likely to witness increased interest from investors in private equity asset class in 2023 owing to inherent domestic demand and expansion of distribution networks in tier II and tier III cities. Manufacturing has emerged as one of the high growth sectors in India, it has seen further traction after the roll out of PLI scheme with major multinational players announcing their investment plans in the country. Commenting on the same, Srinivas N, Managing Director, Industrial and Logistics, Savills India, said, “The rapidly expanding and highly competitive e-commerce market has fuelled the growth of industrial, logistics and warehousing since the last two years. The industrial and logistics sector is likely to see absorption of 40+ million sq ft in 2023. This demand for space could stem from emerging Tier II and Tier III cities, growing demand for urban warehousing and a major transformation in the Indian manufacturing sector backed by Performance Linked Incentives (PLIs) and efficient multi-model connectivity plan for local and global distribution. We expect around 50+ million sq ft of new supply to be infused in the market during the same period.”