Cargo Breaking News
Industrial and warehousing space witnessed absorption of more than 46 mn sq. ft in 2022 which includes over 36 mn sq. ft from tier I cities and over 10 mn sq. ft from tier II & III cities. India witnessed a fresh supply of 47 mn sq. ft in 2022, of which 34 mn sq. ft was from tier I cities and close to 13 mn sq. ft from tier II & III cities, as per the latest data from International real estate advisory firm, Savills India. The new projects delivered with improved specifications and of high quality environmental, health & safety (EHS) standards.
Supply & absorption in tier I cities (2022 vs 2021)
2022 2021 Y-o-Y change
Supply (Mn sq. ft) 34.1 36.0 -5.3%
Absorption (Mn sq. ft) 36.2 35.1 +3.1%
Stock (Mn sq. ft) 300 266 12.8%
Vacancy (%) 9.0% 9.4% -40 bps
Supply & absorption in tier II & III cities (2022 vs 2021) *
2022 2021 Y-o-Y change
Supply (Mn sq. ft) 12.9 8.9 +44.9%
Absorption (Mn sq. ft) 10.1 8.6 +17.4%
*Tier II & III cities include Coimbatore, Guwahati, Indore, Nagpur, Lucknow, Jaipur, Rajpura, Bhubaneswar, Kochi/Ernakulam, Patna and Hosur, Madurai, Varanasi, Hubli, Ludhiana
Among the major cities in India, Delhi NCR led the pack with the highest absorption in 2022 at 16% followed by Mumbai at 14%. Pune and Bengaluru saw absorptions at 13% and 12% respectively, while tier II & tier III cities accounted for 22%.
3PL and e-commerce sectors continued to drive warehousing demand, together accounting for 52% of the total absorption witnessed in 2022, followed by manufacturing sector at 16% and retail sector at 13%. Grade A space accounted 42% of total absorption and 48% of total supply witnessed in 2022.
Absorption & Supply by Grade-2022
Grade Absorption (%) Supply (%)
Grade A 42% 48%
Grade B 58% 52%
Absorption & Supply by City-2022
City Absorption (%) Supply (%)
Bangalore 12% 9%
Chennai 8% 10%
Pune 13% 10%
Mumbai 14% 10%
Delhi-NCR 16% 21%
Hyderabad 6% 3%
Kolkata 6% 6%
Ahmedabad 3% 3%
Tier II & III 22% 28%
Absorption by Sector-2022
Sector Absorption (%)
3PL 42%
E-Commerce 10%
Manufacturing 16%
Retail 13%
FMCG/FMCD 6%
Others 13%
Additionally, tier II & III cities witnessed 10 mn sq. ft of absorption in 2022. These cities are poised to gain further momentum in 2023 and 2024 with e-commerce, retail and 3PL firms capitalizing on consumption-driven growth and pushing the demand for warehousing space.
The overall industrial and warehousing space stock in tier I cities stood at 300 mn sq. ft at end of 2022 and is expected to reach 342 mn sq. ft.in 2023. Meanwhile, Vacancy levels in Tier I cities have decreased from 9.4% in 2021 to 9.0% in 2022 and the yields remain stable across the cities in 2022.
