Bengaluru and Delhi-NCR have secured positions among the top 10 cities in the Asia-Pacific (APAC) region that witnessed a significant increase in warehouse rental rates over the past 12 months, according to a report by real estate consultancy Knight Frank published on Tuesday. However, the rental hike in these cities was comparatively lower than the APAC average of 10.4 percent, which was observed across 17 cities analyzed for the report.

As per the "Asia-Pacific Logistics Highlight H1 2023" report, warehouse rents in Bengaluru registered a 7.5 percent increase in the past year, while in Delhi-NCR, the rise was 6.6 percent. Mumbai, which narrowly missed the top 10 list, recorded a 4.2 percent uptick in warehouse rents.

Among APAC cities, Bengaluru and Delhi-NCR secured the 6th and 8th positions, respectively, in terms of rental rate growth. Knight Frank highlighted that demand in India's primary warehousing markets remains robust, nearing record levels. Both Mumbai and Bengaluru experienced substantial growth in leasing transactions, driven by rapidly diminishing vacancy rates over the last six months.

The report noted, "Activity in Delhi-NCR slowed marginally, albeit from the high base set in the previous period." While the e-commerce sector witnessed a dip in demand, this decline was offset by the third-party logistics (3PL) sector. Anticipating a revival during the festive season, the e-commerce sector is expected to regain momentum in the coming days.

The findings underscore the evolving dynamics of India's warehousing sector, driven by a mix of factors including e-commerce growth, third-party logistics, and seasonal fluctuations.