Warehouse rent up by 1 percent in Delhi from Jan-Jun 2021
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New Delhi: Warehouse rental in the national capital is up by 1.1 percent Year-over-Year in the First Half (H1) of this year whereas rentals in Mumbai and Bengaluru have registered a dip of 7.8 percent and 4.6 percent respectively. According to a report published by realty consultant Knight Frank, rentals for prime warehouse markets across Asia-Pacific (APAC) region remained have largely unchanged for the year.
As per the report, namely Asia Pacific Warehouse Review: H1 2021, the outlook on the rents of prime warehouse markets in H2 this year is expected to remain stable. The report tracks the prime warehouse rental performance across 17 key cities in the APAC region. It also states that 13 of 17 APAC markets recorded stable or increased rents in H1 2021.
For the Indian Warehouse market segment, the recently launched 'India Warehousing Market Report – 2021' states that despite decline in overall rental amounts, Mumbai remained the most expensive prime warehouse rental market in the country, attracting USD 2.93/ SQ M per month. Bengaluru is the second most expensive prime warehousing market in India, recording rental at USD 2.72 / SQ M per month.
"The warehousing sector in India witnessed a marginal impact of the second wave of pandemic as the occupiers were well geared for negating the exigencies. More than half of the area transacted in top Indian warehousing markets were recorded in the prime asset properties. The warehousing markets in primary and secondary Indian markets are likely to remain resilient in coming months," said Mr. Shishir Baijal Chairman and Managing Director, Knight Frank India.
Owing to increased input costs, the Indian asset owners are not expected to reduce the rents in the next 12 months.
Mr. Baijal added, "While higher construction costs, due to the increasing prices of steel and other input materials are expected to leave little room for asset owners to compromise on rent in the next 12 months, the improving but uncertain demand environment due to an evolving pandemic could still cause significant headwinds for rental growth."
The overall realty segmented in India, at present, is marred by rising prices of raw materials, including steel with price of the leading brand of steel going up to Rs. 74,000/tonn.
The report capturing domestic market has projected the warehousing transactions for the top eight Indian cities to grow at acompound annual growth rate (CAGR) of 19 percent to 76.2 mn sq. ft (7.08 mn sq. m) by Financial Year (FY)2026 from 31.7 mn sq ft (2.95 mn sq. m) in FY 2021.
