Bengaluru and Delhi-NCR were among the top 10 cities that saw the highest rise in warehouse rent in the last 12 months in the Asia-Pacific (APAC) region, real estate consultancy Knight Frank said in a report on Tuesday. However, in these cities, the rent rose less than the average of 10.4 per cent in the 17 cities analysed for the report.
According to Asia-Pacific Logistics Highlight H1 2023, warehouse rent in Bengaluru rose 7.5 per cent in the last 12 months. In Delhi-NCR, the increase was 6.6 per cent. Mumbai, which found itself at the 11th spot, saw an increase in rent of 4.2 per cent.
Bengaluru and Delhi-NCR ranked 6th and 8th on the list, respectively.
"Demand in the three main Indian warehousing markets continues to be sustained at near-record levels. Mumbai and Bengaluru experienced healthy growth in leasing transaction volumes as vacancies tightened rapidly through the last six months," Knight Frank said.
"Activity in Delhi-NCR slowed marginally, albeit from the high base set in the previous period."
The demand by the e-commerce sector has dropped, but it was covered by the third-party logistics (3PL) sector. Due to the festive season, e-commerce is expected to stage a recovery in the coming days.
"With India emerging as one of the fastest growing major economies in the world, business activities across the country are moving firmly along the growth path. The Indian warehousing sector in particular has been a standout performer. Transaction volumes in FY23 have equaled the record-breaking levels of FY22. 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 third-party logistics (3PL) sectors," said Shishir Baijal, chairman and managing director and Knight Frank India.
In the APAC region, the list was topped by Manila with a 49.8 per cent rise in warehouse rent. It was followed by 38.6 per cent in Sydney and 23.8 per cent in Brisbane. Out of all the 17 cities, China's Shanghai and Beijing were the only two countries where the rent fell by 2 per cent and 1.9 per cent respectively.
"Conditions within the Chinese mainland market are displaying a divergence from the rest of the region, as its economy continues to underperform," said Christine Li, head of research at Knight-Frank Asia-Pacific.
"However, this is counterbalanced by more positive sentiment in other areas, where the growth in demand outpaces the supply of new units. Long-term structural fundamentals also continue to underpin demand in emerging Southeast Asia markets, alongside India, which is progressively gaining significance within the global manufacturing supply chain," added Li.