Warehouse rents in Mumbai, Bengaluru and Delhi-NCR increased by an average of 7.2 percent during the last fiscal year due to increased demand from the logistics, e-commerce and manufacturing sectors of third parties.

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

Warehouse rent in Bengaluru increased by 6.4 percent to Rs 240 per square foot per annum, while in Delhi-NCR it rose by 5.9 percent to Rs 227.40.

Based on a 12-month outlook, the consultant said prime logistics rents in Mumbai, Bengaluru and Delhi-NCR are expected to rise due to continued demand from third-party logistics, e-commerce and manufacturing sectors.

Shishir Baijal, Chairman and Chief Executive Officer of Knight Frank India, said: “Warehouse rents in India have seen substantial growth, indicating resilience despite global supply chain disruptions and a slowdown in demand from e-commerce players.”

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

“With the robust growth in rents, the market balance has tipped in favor of the landlord. The Indian warehouse market, with resilient fundamentals, is poised for continued growth despite inflationary pressures,” added Baijal.

The report tracked prime logistics rents in 17 key APAC cities, registering an average 3 percent year-over-year increase, driven by Australia, New Zealand, India and Singapore. In H1 2022, all 17 cities registered stable or rising rents in prime warehouse and logistics markets.