Delhi-NCR has emerged as a leading player in the Asia-Pacific logistics market, according to a recent report by Knight Frank. The region has been ranked among the top 10 markets for annual rental growth in the first half of 2024. The report highlights that Delhi-NCR recorded a 3% rental growth, outpacing other Indian cities such as Mumbai and Bengaluru, which both recorded a 2.3% growth, slightly below the regional growth figure. This growth has positioned Delhi-NCR eighth in the APAC logistics market based on annual rental growth. The average rent in the city stands at Rs 20.80 per square foot per month, and the vacancy level in the market is currently at 15.7%.
The report also provides a positive rental outlook for the next six months in the three key Indian markets, attributing this to the continued demand for warehousing and logistics spaces across the country. This demand has been driven by the government’s focus on the manufacturing sector, which has resulted in healthy demand from this sector. The traditional anchor role of third-party logistics (3PL) players has also contributed to strengthening the overall market volumes.
Shishir Baijal, Chairman and Managing Director of Knight Frank India, emphasized the importance of the manufacturing sector in driving demand within the Indian logistics market. He stated, The government’s focus on the manufacturing sector is proving successful, resulting in healthy demand from this sector. Along with the traditional anchor role of 3PL players, this has strengthened the overall market volume.
In contrast to the Indian market, the overall Asia-Pacific logistics market saw a rental growth of 2.4% in year-over-year (YoY) terms, marking a significant slowdown from the 6.2% increase observed in H1 2023. Despite 13 of 17 tracked cities seeing rent increases in H1 2024, overall rental growth slowed due to challenging conditions in Chinese Mainland, especially in Beijing and Shanghai. However, Singapore saw logistics rents grow 6.7% in six months and 10.8% YoY, driven by strong manufacturing and 10 consecutive months of PMI (Purchasing Managers’ Index) expansion.
The report’s findings are significant as they highlight the resilience and growth potential of the logistics rental market in Delhi-NCR and other Indian cities. They also underscore the importance of government policies and industry trends in shaping the market dynamics. The continued demand for warehousing and logistics spaces, coupled with the government’s focus on the manufacturing sector, is expected to sustain the market’s growth in the near to medium term.
