The future is bright for India’s manufacturing, warehousing sectors post-pandemic

Industrial and warehousing space absorption hit 22.4m sq ft in H1 2021 alone. 

The manufacturing and warehousing sectors in India were not exempted from the uncertainties brought about by the pandemic, but analysts are optimistic about market recovery as vaccination rollouts continue to advance.

According to Savills, the top 8 cities of India saw industrial and warehousing space absorption of 22.4 million sq. ft in H1 2021, almost on par with the 20.6 million sq. ft recorded for the whole year 2020. This healthy absorption is attributed to the robust growth in e-commerce, 3PL and manufacturing sectors as well as rising demand in emerging tier II and tier III cities.  

There was also considerable growth in industrial supply despite delayed construction activities. Savills reveals there was a fresh supply of 20.6 million sq. ft in H1 2021 in India’s top 8 cities. Again, almost on par with the 22.5 million sq. ft recorded in 2020. “NCR accounted for 35% of the total supply witnessed in H1 2021 followed by Mumbai (21%), and Pune (13%).  The overall industrial and warehousing space stock stands at 250 million sq. ft and vacancy levels at 7.1% as of H1 2021,” notes Savills.

“In our outlook post-second wave of COVID-19, we look at the future of the industrial sector and outline some trends that will shape the segment in time to come. Growing demand for cold chain, pharmaceutical warehouses as well as growth in e-commerce and organised retail are likely to drive warehousing demand in 2021. In addition, strong macro-economic fundamentals and the government’s policy support in implementation will continue to fuel growth for the entire sub asset class of industrial & logistics,” Savills adds.

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