Rentals for prime warehouse markets across Asia-Pacific (APAC) region have remained largely unchanged despite Covid19-induced weak economic conditions. The region saw a marginal fall of 0.1% year-on-year in the first half of 2021.Despite correction in rentals Mumbai remains the most expensive warehousing rental market in India.The outlook on the rents of prime warehouse markets in the second half of 2021 is expected to remain stable, showed a Knight Frank report.

“Despite operating under the shadow of the pandemic, warehouse markets across the region have remained largely stable, driven by sustained demand from the e-commerce sector. Recent events that have impacted commitments to customers have put the development of supply chain resilience into focus and major occupiers are responding by re-configuring their strategies through building out inventory buffers and expanding urban distribution nodes,” said Tim Armstrong, head of occupier services & commercial agency, Asia Pacific at Knight Frank.According to him, this will have positive knock-on effects for strengthening demand for logistics spaces.While warehouse rentals in Mumbai Metropolitan Region and Bengaluru witnessed an on-year decline of 7.8% and 4.6%, respectively, National Capital Region (NCR) witnessed a marginal increase of 1.1% during the period. The rental forecast for the next 12 months for these cities is expected to be stable.Despite decline, Mumbai remained the most expensive prime warehouse rental market in the country, attracting $2.93 per sq meter per month. Bengaluru is the second most expensive prime warehousing market in India, recording monthly rental at $2.72 per sq meter, while monthly rentals in NCR stood at $2.59 per sq meter.Owing to increased input costs, the Indian asset owners are not expected to reduce the rents in the next 12 months.Annual warehousing transactions across top eight Indian cities are expected to grow at a compound annual growth rate of 19% to 76.2 million sq ft over the next five years from current 31.7 million sq ft, showed recent data from Knight Frank India.According to the report that tracks the prime warehouse rental performance across 17 key cities in the APAC region, 13 of 17 markets recorded stable or increased rents in the first half of 2021. Rents in Jakarta and Beijing saw the sharpest increase, 5.6% and 4.4% respectively, in the APAC region. The most expensive warehousing rental market in the region, Hong Kong SAR, is expected to remain stable.