India's Industrial and Logistics Space to Exceed 60 Million Sq Ft, Says New Report

New Delhi, December 3 (IANS): India's rapid urbanisation, strong infrastructure growth, and economic expansion have significantly increased demand. This surge is driving construction activity in the industrial and logistics sectors. Supply in these sectors is expected to exceed 60 million square feet annually over the next 3-4 years, according to a new report.

A report by Savills India, a global real estate advisory firm, reveals that, "On an average, 3.4 per cent to 6.7 per cent increase in construction costs for general manufacturing and 4.8 per cent to 6.7 per cent for grade-a warehousing were registered between H1 2020 and H1 2024."

The report also stated that, “"Among cities, Kolkata recorded the highest escalation for General Manufacturing costs at 6.7 per cent, followed closely by Chennai (6.5 per cent). For Grade-A Warehousing, Chennai led the surge with a 6.7 per cent increase, with Bengaluru and Hyderabad each witnessing a 6 per cent rise."

The report also highlighted that, "This increase can be attributed to the rise in the prices of crude oil, steel, aluminium, cement, labour, equipment rentals and costs of plumbing and fixtures," 

Insights from Key Executives

Sumit Rakshit, Managing Director of Project Management Services at Savills India, stated that, "India is emerging as a global manufacturing hotspot. Naturally, the demand for manufacturing and warehousing facilities was expected to surge in the coming years. We expect construction costs for industrial and warehousing projects to increase marginally over the next 3-4 years."

According to the report, "Despite rising costs, India remains cost-competitive, with construction expenses for manufacturing and warehousing substantially lower than in developed nations like the US, UK, France, and Germany, owing to affordable labour and relatively lower material costs."

According to Srinivas N, Managing Director of Industrial and Logistics at Savills India, "The manufacturing and warehousing sectors are experiencing substantial construction, driven by increasing market demand, supportive government policies, growth in the FMCG and FMCD, electronics, apparel, EV and associated sectors."

"The changing occupier preferences to meet ESG (Environmental, Social, and Governance) standards were likely to lead to increased demand for sustainable and energy-efficient buildings, driving the adoption of green construction practices in industrial and warehousing sectors," he further added.

Follow us for the Latest Infra Industry Updates

Facebook - https://www.facebook.com/infrajunction/   
Instagram - https://www.instagram.com/infra_junction/