Indian Cities Show Resilience in APAC Logistics Market

Indian cities Delhi-NCR, Mumbai, and Bengaluru demonstrated stable rental growth in H1 2024, despite a general slowdown in the Asia-Pacific region. Knight Frank's report highlights robust demand driven by manufacturing and 3PL sectors, with significant private equity inflows expected to maintain market momentum.

The Asia-Pacific (APAC) region recorded a year-over-year (YoY) rental growth of 2.4% in H1 2024—down from a 6.2% increase in H1 2023. However, Indian cities, specifically Delhi-NCR, Mumbai, and Bengaluru, have shown stable performance with a promising rental outlook for the next six months, according to Knight Frank's latest report.

Delhi-NCR topped the chart among Indian cities with a 3.0% YoY rental growth, surpassing the regional average. Meanwhile, Mumbai and Bengaluru recorded a YoY rental growth of 2.3%, placing them at 11th and 12th in the APAC logistics market. Despite elevated vacancy levels, sustained demand for warehousing and logistics spaces is expected to keep rent levels stable for the rest of 2024.

Shishir Baijal, Chairman and Managing Director of Knight Frank India, stressed the importance of the manufacturing sector in driving demand within the Indian logistics market, which saw robust activity in H1 2024. Mumbai and NCR accounted for significant shares of the total warehousing volume, driven by the 3PL and manufacturing sectors. Christine Li, Head of Research for APAC at Knight Frank, noted that despite challenges in Mainland China, the long-term fundamentals supporting the APAC region's logistics market remain strong.

(With inputs from agencies.)