The stronger rental momentum in India reflects continued demand from manufacturers, e-commerce companies, retailers and third-party logistics providers, as occupiers seek modern facilities to accommodate larger inventories, automation and increasingly sophisticated distribution networks.
Prime logistics rents in Mumbai rose 5.3% year-on-year in in the first half of the year, while Delhi-NCR and Bengaluru recorded growth of 5.2% and 4.4%, respectively, according to Knight Frank data. This compares with 1.2% half-year-on-half-year rental growth across the Asia Pacific logistics market during the period.
“India’s logistics sector continues to demonstrate strong structural resilience, supported by sustained manufacturing activity, domestic consumption and the ongoing diversification of supply chains,” said Shishir Baijal, International Partner, CMD, Knight Frank India.
With occupiers placing greater emphasis on operational efficiency and modern, institutional-grade facilities, he expects India’s logistics real estate market to remain on a steady growth trajectory in the near to medium term.
“Rental growth across India’s key logistics markets is strengthening the investment case for institutional-grade warehousing and industrial assets. The market is moving towards larger, professionally managed developments, particularly along established consumption and manufacturing corridors. For developers and investors, this creates an opportunity to build portfolios with long-term relevance rather than simply add capacity,” said Anshuman Singh, MD & CEO, IndoSpace.
He sees significant headroom for organised logistics real estate as occupier requirements continue to evolve.Mumbai recorded the strongest rental growth among the three Indian markets, with prime rents at Rs 26 per sq ft per month. Rents increased 4.4% over the six months to June, while vacancy declined to 13.5%. Experts expect further rental growth over the next 12 months, with the market remaining balanced.
In Delhi-NCR, prime logistics rents stood at Rs 22.30 per sq ft per month, rising 2.8% during the period and 5.2% annually. Vacancy declined to 14.7%, while the market remained balanced and the 12-month rental outlook pointed towards further growth.
Bengaluru saw prime rents rise 2.2% over the six-month period and 4.4% year-on-year to Rs 23.50 per sq ft per month. Vacancy declined to 17.6%, with the market balance remaining stable and the rental outlook positive.
India’s performance stood out against a more measured APAC logistics market, where 15 of the 18 cities tracked by Knight Frank recorded stable or increasing rents during the period. Rental growth was constrained in some East Asian markets by elevated availability.
“The Asia-Pacific logistics market has moved into a more mature phase of the cycle, where occupiers are focusing on the type of spaces they occupy rather than simply securing capacity. With rental growth remaining measured across much of the region and a broader range of options available, occupiers have greater scope to optimise portfolios, consolidate operations and upgrade into higher-specification facilities,” said Tim Armstrong, Global Head of Occupier Strategy and Solutions, Knight Frank.
Across the region, leasing activity was increasingly driven by relocations, consolidation and upgrades rather than outright expansion of logistics footprints. Occupiers are becoming more selective and prioritising operational efficiency, network performance and asset quality.
This is strengthening the flight-to-quality trend, with demand increasingly favouring modern warehouses offering better functionality, technology integration and sustainability features.
The demand outlook is also being supported by investments linked to semiconductor and advanced manufacturing supply chains, which are creating additional requirements for logistics and warehousing facilities.