Resilient fundamentals foster rental stability in warehouse markets across A-Pac: Knight Frank

Mumbai (Maharashtra) [India], Aug 14 (ANI): Despite a weak global economy, rentals for prime warehouse markets across Asia Pacific region remained largely unchanged in first half of the year, according to Knight Frank's latest report 'Asia Pacific Warehouse Review: H1 2021.'
"The region saw a marginal fall of 0.1 per cent year-on-year. The outlook on the rents of prime warehouse markets in H2 2021 is expected to remain stable," it said.
The report tracks the prime warehouse rental performance across 17 key cities in the A-Pac region. It said 13 of 17 markets recorded stable or increased rents in H1 2021.
Rents in Jakarta and Beijing saw the sharpest increase at 5.6 per cent and 4.4 per cent respectively. The most expensive warehousing rental market in the region Hong Kong SAR is expected to remain stable.
With reference to the Indian markets, National Capital Region (NCR) witnessed a marginal warehouse rental increase of 1.1 per cent YoY in H1 2021. Mumbai and Bengaluru witnessed a decline of 7.8 per cent and 4.6 per cent respectively.
The rental forecast for the next 12 months for these cities is expected to be stable.
According to the recently-launched 'India Warehousing Market Report 2021,' Knight Frank India projected transactions for top eight cities (primary markets) to grow at a compound annual growth rate of 19 per cent to 76.2 million square feet by financial year 2026 from 31.7 million square feet in FY 2021.
Despite decline, Mumbai remained the most expensive prime warehouse rental market in the country, attracting USD 2.93 per square metre per month. Bengaluru is the second most expensive prime warehousing market in India, recording rental at USD 2.72 per square metre per month.
Rental for prime rental asset class in NCR recorded at USD 2.59 per square metre per month. Due to increased input costs, Indian asset owners are not expected to reduce the rents in the next 12 months.
Shishir Baijal, Chairman and Managing Director of Knight Frank India, said the warehousing sector in India witnessed a marginal impact of second wave of pandemic as 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 primary and secondary Indian markets are likely to remain resilient in coming months," he said. (ANI)