Industrial and Warehouse Sector Absorption Up 7% in H1 2023

07 Jul 2023 CW Team

According to the findings, the industrial and warehouse sector saw a new supply of 27.4 million sq.ft. during the same time, representing a 36% increase from the 20.2 million sq.ft. recorded in the first half of 2022.

The rising emphasis on quality and compliance, as well as changing occupier preferences to satisfy ESG (Environmental, Social, and Governance) requirements, has resulted in a significant increase in demand for Grade A warehouse and ready-fitted-out manufacturing space in recent years.

The country's overall absorption of Grade A space has increased dramatically, from 36% in the first half of 2022 to 53% in the first half of 2023.

Tier II and III cities are also seeing substantial expansion as important sourcing and consumption hubs, facilitating distribution. This has led in a 22% year-on-year increase in absorption in these cities, rising from 4.1 million square feet in the first half of 2022 to 5.0 million square feet in the first half of 2023. Mumbai had the greatest absorption among Tier I cities, accounting for 18% of overall absorption in the country, followed by Delhi-NCR at 14% and Pune at 10%. Both Bengaluru and Chennai absorbed 9% of the total.

“Driven by inherent domestic demand and the expansion of distribution networks in tier II and tier III cities, the industrial and logistics sector is on a growth path. The 3 PL, manufacturing, urban warehousing and retail sectors are likely to contribute significantly to the absorption. We expect absorption in excess of 40 million sq. ft in 2023.”

The manufacturing sector, which has gained impetus due to increased activity backed by different incentive schemes, has also played a significant role in driving up demand, accounting for around 40% to 50% of overall demand. According to the report, the 3PL industry continued to drive warehouse demand in H1 2023, accounting for 44% of total absorption, a significant rise from 37% in H1 2022.

The industrial and warehouse sector absorbed 22.4 million square feet in H1 2023, a 7% rise over the 20.9 million square feet absorbed in the first half of 2022. According to a recent study conducted by Savills India, a multinational real estate advisory firm, Tier I cities accounted for 75% of total absorption in the first half of 2023, while Tier II and III cities supplied the remaining 25%. According to the findings, the industrial and warehouse sector saw a new supply of 27.4 million sq.ft. during the same time, representing a 36% increase from the 20.2 million sq.ft. recorded in the first half of 2022. The rising emphasis on quality and compliance, as well as changing occupier preferences to satisfy ESG (Environmental, Social, and Governance) requirements, has resulted in a significant increase in demand for Grade A warehouse and ready-fitted-out manufacturing space in recent years. The country's overall absorption of Grade A space has increased dramatically, from 36% in the first half of 2022 to 53% in the first half of 2023. Tier II and III cities are also seeing substantial expansion as important sourcing and consumption hubs, facilitating distribution. This has led in a 22% year-on-year increase in absorption in these cities, rising from 4.1 million square feet in the first half of 2022 to 5.0 million square feet in the first half of 2023. Mumbai had the greatest absorption among Tier I cities, accounting for 18% of overall absorption in the country, followed by Delhi-NCR at 14% and Pune at 10%. Both Bengaluru and Chennai absorbed 9% of the total. “Driven by inherent domestic demand and the expansion of distribution networks in tier II and tier III cities, the industrial and logistics sector is on a growth path. The 3 PL, manufacturing, urban warehousing and retail sectors are likely to contribute significantly to the absorption. We expect absorption in excess of 40 million sq. ft in 2023.” The manufacturing sector, which has gained impetus due to increased activity backed by different incentive schemes, has also played a significant role in driving up demand, accounting for around 40% to 50% of overall demand. According to the report, the 3PL industry continued to drive warehouse demand in H1 2023, accounting for 44% of total absorption, a significant rise from 37% in H1 2022. See also: Leasing of warehousing space at record 51.32 mn sqft in FY23Industrial and Logistics sector to grow 26% YOY in FY23

Building Material

11 Dec 2025

Suraj Estate Wins Euromoney Award for India’s Best Residential Developer

"Suraj Estate Developers Limited has received the Euromoney Real Estate Award 2025 for ‘India’s Best Residential Developer’, positioning the company among globally benchmarked leaders in the sector. The recognition reflects its four-decade legacy in delivering high-quality residential and redevelopment-led projects across South Central Mumbai. The Euromoney Real Estate Awards, presented by the London-based Euromoney magazine, are widely regarded as one of the most credible global assessments of performance in real estate, banking and finance. Winners are selected through surveys of inte..

Building Material

11 Dec 2025

Lloyds Metals, Tata Steel Sign MoU to Explore Strategic Collaboration

"Lloyds Metals and Energy Limited has signed a non-binding Memorandum of Understanding with Tata Steel Limited to evaluate potential areas of strategic cooperation across mining, logistics, pelletisation and steelmaking. The MoU was signed by B Prabhakaran, Managing Director of Lloyds Metals, and Mr T V Narendran, CEO and Managing Director of Tata Steel. The partnership framework aims to leverage the natural operational synergies between both companies and assess opportunities in greenfield steel projects, iron ore mining, slurry pipeline infrastructure, pellet manufacturing in iron ore–ric..

Building Material

11 Dec 2025

IndiaAI, Gujarat Govt Host Regional Conclave Ahead of 2026 AI Summit

The IndiaAI Mission under the Ministry of Electronics and Information Technology, along with the Government of Gujarat and IIT Gandhinagar, convened a Regional Pre-Summit Event at Mahatma Mandir, Gandhinagar. The initiative is part of the build-up to the India–AI Impact Summit 2026, scheduled for 15–20 February 2026 at Bharat Mandapam, New Delhi. The conclave brought together senior policymakers, technology leaders, researchers and industry practitioners to examine how AI can accelerate economic, digital and social transformation across sectors. The programme focused on the overarching th..