Real Estate In Industrial And Logistics Record Over 50% Demand Growth In Jul-sep Qtr: Savills Report

Real estate business in the industrial and logistics sector in India demonstrated robustness in the July-september quarter, driven by third party logistics and manufacturing.

According to Savills, a global real estate advisory firm, the absorption in the industrial and logistics sector was at 17.5 million square feet, up from 11.4 million square feet in the same quarter of 2023. This represented a substantial year-on-year (YoY) increase of 53.5 per cent. 

According to the consultancy firm's report, Tier 1 cities led the charge in absorption, accounting for 14.0 million square feet (80 per cent) of the total, while Tier 2 and 3 cities contributed 3.5 million square feet (20 per cent).

This growth, according to Savills, was driven primarily by sustained demand from the third-party logistics (3PL) sector, which comprised 38 per cent of total absorption, alongside manufacturing at 16 per cent.

Besides, there was a sharp rise in demand from the fast-moving consumer goods (FMCG) and fast-moving consumer durables (FMCD) sectors, contributing 17 per cent.

In addition to strong absorption, the sector witnessed a fresh supply of 19.3 million square feet during the July-September quarter, reflecting a 9 per cent growth on a yearly basis.

"Businesses are redefining their strategies towards value creation and growth, particularly in sectors like FMCG, FMCD, EV and auto, electronics, defense, and apparel, which are experiencing increased demand. The logistics services sector, supported by third party logistics companies, is fulfilling the majority of sectoral requirements in addition to their planned consolidation and business needs," said Srinivas N, Managing Director, Industrial and Logistics, Savills India.

Urban logistics, specifically quick commerce, is emerging as the new kid on the block, with many e-commerce companies piloting models to gain market share.

"In summary, India continues to shine, backed by the government's PLI scheme, infrastructure developments, and various policies that support the manufacturing and logistics sectors, added Srinivas N. (ANI)