India's Urban Growth Drives Annual Logistics Supply to 60M Sq. Ft.

India's rapid urban development, strong infrastructure expansion, and economic progress have together created substantial demand, enhancing construction efforts in the industrial and logistics sector and supply, which is expected to exceed 60 million square feet each year in the coming 3-4 years.

According to a report by Savills India, a global real estate advisory firm, "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 further said, "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."

"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," the report said.

Sumit Rakshit, Managing Director, Project Management Services, Savills India said, "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."