Delhi-NCR has emerged as a standout performer in the Asia-Pacific logistics market, securing a spot among the top 10 markets for annual rental growth in the first half of 2024, according to a report released by Knight Frank on Thursday.
With a notable rental growth rate of 3% year-on-year, Delhi-NCR ranks eighth in the region for logistics rental increases.
Monthly rents in the area are now at Rs 20.80 per square foot, while the market faces a vacancy rate of 15.7%.
This growth surpasses the rental increases recorded in Mumbai and Bengaluru, both at 2.3%.
The report highlights a steady outlook for logistics rentals across major Indian cities, driven by persistent demand for warehousing and logistics facilities.
Shishir Baijal, Chairman and Managing Director of Knight Frank India, attributed the growth to the government’s focus on boosting the manufacturing sector.
“The emphasis on manufacturing has spurred significant demand, complemented by the sustained role of third-party logistics providers. This has bolstered overall market volumes,” Baijal explained.
The Indian warehousing market has experienced substantial rental increases since the pandemic, largely due to a surge in occupier demand reaching peak levels through FY 2023.
Despite a recent slowdown in occupier activity, rental growth in Bengaluru, Mumbai, and Delhi-NCR has continued at the same pace as the previous half-year.
Overall, the Asia-Pacific logistics market saw a more modest rental growth of 2.4% year-on-year in H1 2024, a sharp decline from the 6.2% increase observed in the same period last year.
The slowdown is attributed to challenging conditions in major Chinese cities like Beijing and Shanghai, despite 13 of the 17 tracked cities reporting rental increases.
In contrast, Singapore’s logistics sector has thrived, with rents rising by 6.7% in six months and 10.8% year-on-year, fueled by strong manufacturing activity and sustained PMI (Purchasing Managers’ Index) expansion for ten consecutive months.
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