Warehouse rent surge: Bengaluru, Delhi-NCR among top 10 APAC cities
What's the story
Bengaluru and Delhi-NCR are among the top 10 cities in the Asia-Pacific (APAC) region, with the highest increase in warehouse rent over the past 12 months.
The 17-city list was compiled by real estate consultancy Knight Frank.
Bengaluru saw a 7.5% rise, while Delhi-NCR experienced a 6.6% increase. However, these figures were lower than the 17-city average of 10.4%.
Manila topped the list with a staggering 49.8% rise in warehouse rent.
Details
India's warehousing sector maintains momentum
Knight Frank has reported that India's warehousing sector has maintained its strong performance, with transaction volumes in FY23 equaling the record-breaking levels of FY22.
Although demand from the e-commerce sector has decreased, the third-party logistics (3PL) sector has compensated for the decline.
The upcoming festive season is expected to boost e-commerce demand, while the manufacturing and 3PL sectors will continue to drive market growth.
What Next?
Leasing transactions thrive amid e-commerce dip
Despite a drop in e-commerce demand, Mumbai and Bengaluru have experienced healthy growth in leasing transaction volumes as vacancies tightened rapidly over the last six months.
Activity in Delhi-NCR slowed marginally but remained high compared to previous periods.
The festive season is anticipated to bring a recovery in e-commerce demand, further contributing to the growth of India's warehousing sector.
Insights
Manila leads APAC in warehouse rent growth
Manila topped the list of APAC cities with a 49.8% rise in warehouse rent, followed by Sydney and Brisbane at 38.6% and 23.8%, respectively.
In contrast, Shanghai and Beijing were the only two cities to experience rent declines, with decreases of 2% and 1.9%, respectively.
Christine Li, head of research at Knight Frank Asia-Pacific, noted that the Chinese mainland market is diverging from the rest of the region as its economy continues to underperform.