Bengaluru saw the highest rise in warehouse rents among Indian cities, with an annual average jump of 7.5 percent, overtaking Delhi-NCR and Mumbai in the top 10 Asia-Pacific (APAC) warehousing markets in H1 2023, a report by Knight Frank India has said.
The Asia-Pacific Logistics Highlight H1 2023 report said that the rental growth was up 10.4 percent from the same period of the previous year
While rent in Bengaluru, ranked sixth in the APAC list, rose to Rs 21.5 per sq ft a month, Delhi-NCR, which is positioned eighth, reported a 6.6 percent jump from the previous year at Rs 20.20 per sq ft per month.
Manila tops the list with a 49.3 percent year-on-year (YoY) jum in rent followed by Sydney and Brisbane at 38.6 percent and 23.8 percent, respectively. Bangkok ranked last with rentals dropping 0.2 percent.
Mumbai was ranked 11th with an annual growth of 4.2 percent at Rs 23 per sq ft a month.
The vacancy level for Delhi and Mumbai dropped by 9.7 percent and 10.3 percent. While Bengaluru saw the highest vacancy level of 15.8 percent compared to 28.2 percent last year.
"Mumbai and Bengaluru experienced healthy growth in leasing transaction volumes as vacancies tightened rapidly through the last six months. Activity in Delhi-NCR slowed marginally, albeit from the high base set in the previous period. Rents continued to rise in the first half of 2023 due to sustained demand and an increase in input costs," the report added.
Knight Frank, however, pointed out that though e-commerce demand had come down, manufacturing and 3PL players plugged the gap.
"Demand from the e-commerce sector is expected to recover in the coming months and this is expected to keep the market buoyant along with the rising demand from manufacturing and 3PL (third-party logistics) sector," Shishir Baijal, Chairman & Managing Director, Knight Frank India said.
Southeast Asian cities report stable rentals
The report added that most southeast Asian cities tracked in the report recorded stable or improved rents, with Manila recording the highest growth fuelled by sustained demand from e-commerce.
Preference for institutional-grade facilities in core areas and last-mile locations continued to propel leasing activity in the region, while the China Plus One strategy also saw ongoing expansions by major manufacturers in Southeast Asia.
In Australasia, limited availability drove the broad–based rental growth as vacancy rates, especially in the Eastern Seaboard continued to sit at record-low levels.
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