According to a survey by Savills India, construction costs for Grade A warehousing have grown 9.26% to 10.44% on average, with Mumbai and Kolkata having the highest construction costs for industrial and warehousing facilities. To arrive at the overall cost, the costs of the most regularly used construction materials were calculated across cities. Cement, steel, crude oil, copper, glass, wood, and other materials, as well as labour wages, are among these materials.
“Industrial and warehousing is one of the most resilient segments in India. The demand for industrial and warehousing facilities is expected to remain unscathed in the long term. We expect construction costs for industrial and warehousing projects to increase in 2022. However, the magnitude of growth is dependent on material costs, labour, equipment rental costs, interest rates and other related costs,” said Srinivas N, Managing Director, Industrial and Logistics, Savills India.
According to Savills India, as of Q1 2022, Mumbai and Kolkata witnessed the highest construction costs at Rs 2,115 per sq ft for grade A warehousing space and Rs 3,295 per sq ft for a general manufacturing facility. This was followed by Pune that saw the costs at Rs 2,100 and Rs 3,265 per sq ft respectively. Construction costs have increased due to rising material prices such as crude oil, steel, aluminium, cement, labour, equipment rental costs and costs of plumbing and fixtures. Additionally COVID has caused a significant shift in construction costs.
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