New Delhi, April 1 Leasing of industrial and warehousing spaces grew by 16% in January-March across 24 major cities due to increased demand from e-commerce players, third-party logistics firms, and manufacturers, according to Savills.
Savills' real estate data indicated that the absorption of industrial and warehousing spaces stood at 18.5 million sq ft in the first quarter of this year, compared to 16 million sq ft in the previous year.
Eight tier-I cities accounted for 79% of this absorption, while 16 tier-II and tier-III cities contributed 21%.
Tier-I cities include Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, Delhi-NCR, and Pune.
Tier-II and Tier-III cities include Guwahati, Bhubaneshwar, Patna, Hosur, Coimbatore, Rajpura, Lucknow, Jaipur, Nagpur, Surat, Indore, Kochi, Hubli, Vizag, Belgaum, and Anantapur.
The manufacturing segment continues to be the strongest demand driver, accounting for 6.5 million sq ft (35%) of the total leasing in January-March 2026.
This is followed by sustained demand from the 3PL segment, which contributes 23% overall, while the FMCG and FMCD segments contribute 14%. The e-commerce segment is gaining traction, contributing 11% to overall absorption, followed by the retail segment at 4%.
Savills stated that new supply rose by 39% to 22.1 million sq ft in Q1 2026.
Tier-I cities contributed a significant 18.6 million sq ft (84%), while Tier-II and Tier-III cities added 3.4 million sq ft (16%).