Warehousing rents in Mumbai, Bengaluru, NCR up 7.2% in FY'22

23 Aug 2022 CW Team

Warehousing rents in Mumbai, Bengaluru and Delhi-NCR rose by an average 7.2 per cent during the last fiscal on higher demand from third party logistics, ecommerce and manufacturing sectors.

Knight Frank in its Asia-Pacific Logistics Highlights H1 2022’ report said Mumbai saw an annual growth of 9.3 per cent in prime warehousing rents to Rs 265 per square foot per year in the last fiscal, from Rs 243 per sq ft in the previous year.

Warehousing rent in Bengaluru rose 6.4 per cent to Rs 240 per sq ft per year, while in Delhi-NCR it increased by 5.9 per cent to Rs 227.40.

On a 12-month outlook basis, the consultant said the prime logistic rents across Mumbai, Bengaluru and Delhi-NCR are expected to increase on the back of sustained demand from third party logistics, e-commerce and manufacturing sectors.

Shishir Baijal, chairman and managing director, Knight Frank India, said, "Rents for warehouses in India witnessed a substantial growth, signifying resiliency despite supply chain disruptions globally and a slow-down in demand from ecommerce players."

In the second half of 2022, he said the 3PL (third party logistics) players and the manufacturing industry are expected to drive space take-up, while ecommerce players resume expansion plans.

"With the robust growth seen in rents, market balance has tilted in favour of the landlord. The Indian warehouse market, with resilient fundamentals, is poised for sustained growth despite inflationary pressures," Baijal added.

The report tracked prime logistics rents across 17 key APAC cities, which registered an average rise of 3 per cent year-on-year, propelled by Australia, New Zealand, India and Singapore. In H1 2022, all of the 17 cities recorded stable or rising rents in prime warehouse and logistics markets.