The industrial and logistics sector started the year impressively, with strong absorption of 13.5 million square feet in the first quarter of 2024 compared to 11 million square feet in the first quarter of 2023, representing year-over-year growth. A recent report revealed a growth of 22.7 per cent.

The overall absorption during the first quarter of 2024 is led by continued demand from the transportation and manufacturing sectors, in addition to increasing demand from the consumer goods sector. In addition, the adoption of manufacturing warehouses has contributed significantly to the overall absorption.

The report notes that the sector saw new supply of 12.9 million square feet in the first quarter of 2024, indicating a growth rate of 4 percent. Compared to the first quarter. 2023 levels, of which 9.8 million square feet (76 percent) were from Tier I cities and 3.1 million square feet (24 percent) were from Tier II and III cities.

Grade A space represents 45 percent of the supply and 41 percent of absorption in the first quarter of 2024. The shift in occupier preferences to meet environmental, social, and governance (ESG) criteria is likely to drive demand for grade-A warehousing and prefabricated factory space, the report highlighted. .

Class A space represented 45 percent of supply and 41 percent of absorption in Q1 2024. Shift in occupier preferences to meet ESG (environmental, social and governance) criteria drives demand Report highlights warehousing and factory space Ready made is top notch.

The composition of demand has remained almost unchanged in the recent past and most demand segments are growing at comparable rates. 3PL, the largest component of demand, accounted for 36 percent of the total absorption in the first quarter of 2024.

Tier II and III cities saw an increase in 3PL absorption, as increased supply chain outsourcing creates ways to stock Larger. Spaces. The manufacturing sector, supported by various government incentive schemes, has played an important role in driving demand. This is a component of demand that rose significantly from 16 percent in 2022 to 23 percent in the first quarter of 2023. Its share also stabilized at 25 percent in the first quarter of 2024.

The FMCD sector also gained momentum It saw 13 percent of the total absorption seen in the first quarter of 2024 compared to 7 percent in the first quarter of 2023. Other manufacturing warehouses contribute, including manufacturing warehouses, cold storage, chemical storage, free trade zones, and ICD, and urban repositories of about 14 percent. p>

“The growing trend of supply chain outsourcing has led to further expansion of 3PL players in tier II and III cities, resulting in increased demand for warehousing space. The manufacturing sector still accounts for more than 25% of the total absorption, The improvement in manufacturing activities is also likely to lead to increased utilization of manufacturing warehouses. “The e-commerce sector is likely to see increased activity in the future,” said Srinivas N, Managing Director, Industrials & Logistics, Savills India. He also stated that the sector is expanding its urban distribution and expanding its reach to Tier II and III cities and Srinivas added, “Tier II and III cities are likely to witness significant growth as prominent supply, consumption and distribution hubs.”

In. Q1 2024, Delhi-NCR remained at the top with the largest contribution of 23 per cent of the total supply, followed by Bengaluru and Kolkata at 12 per cent and 10 per cent respectively and tier II and III cities together accounted for 24 per cent of the total supply

In terms of absorption, Delhi-NCR led the pack with the highest contribution of 21 per cent in Q1 2024, followed by Pune. and Bengaluru by 12 per cent each. Pion's contribution to GE absorption