Tier-2 Cities Now Becoming the Focus for Warehousing and Industrial Parks

In recent times, tier-II cities have become the new focal points for warehouses and industrial parks. These cities are seeing the development of world-class integrated logistics parks supported by institutional funds, as well as contemporary industrial parks backed by state governments. Multinational companies are now leasing contiguous space in investment-grade facilities in these cities.

In 2023, companies took over 5 million sq ft of warehousing space in tier-II cities such as Lucknow, Chandigarh, Nashik, Hosur, and Coimbatore. These cities are emerging as the central industrial corridors, with airports in Indore, Chandigarh, Coimbatore, Lucknow, Nashik, and Jaipur being equipped with cargo handling units.

Major warehousing occupants such as Amazon, Flipkart, Nestle, and Asian Paints have established their presence in multiple cities like Jaipur, Lucknow, Coimbatore, Hosur, Nashik, Vadodara, and Indore.

According to Anshuman Magazine, Chairman & CEO, India, Southeast Asia, Middle East & Africa, CBRE, "Improved connectivity and infrastructure, coupled with the surging e-commerce boom, have made tier II and III cities increasingly attractive. The country’s strong consumption story from the non-metro cities, same-day deliveries and deepening internet penetration shaping digital buying decisions have further amplified the growth of warehousing facilities in these markets."

A recent CBRE report highlights that total I&L (Industrial and Logistics) stock in the eight tier-II cities stood at about 46 million sq ft, with Chandigarh, Jaipur, and Lucknow dominating the I&L market. The total I&L supply recorded in these eight cities was 13 million sq ft. Top cities dominating supply addition include Chandigarh, Hosur, and Jaipur.