Indian Cities Shine Amid APAC Logistics Slowdown
Indian cities such as Delhi-NCR, Mumbai, and Bengaluru have demonstrated stable rental growth in the first half of 2024, despite a general slowdown across the Asia-Pacific (APAC) region. According to a report by Knight Frank, these cities have maintained strong demand driven by the manufacturing and third-party logistics (3PL) sectors, with private equity inflows expected to sustain market momentum.
In H1 2024, the APAC region experienced a year-over-year (YoY) rental growth of 2.4%, a significant decline from the 6.2% increase recorded in H1 2023. Despite this regional downturn, Indian cities have shown resilience, with Delhi-NCR leading with a 3.0% YoY rental growth, surpassing the regional average. Mumbai and Bengaluru followed with a YoY growth of 2.3%, ranking 11th and 12th in the APAC logistics market, respectively.
Although vacancy levels remain high, the continued demand for warehousing and logistics spaces is expected to keep rental rates stable through the remainder of 2024.
Shishir Baijal, Chairman and Managing Director of Knight Frank India, emphasized the role of the manufacturing sector in driving demand within the Indian logistics market. Mumbai and Delhi-NCR have been significant contributors to the total warehousing volume, fueled by the 3PL and manufacturing sectors. Christine Li, Head of Research for APAC at Knight Frank, noted that while challenges persist in Mainland China, the long-term fundamentals supporting the APAC logistics market remain robust.
