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Warehouse rental rose 1.1 per cent in Delhi-NCR, but fell 7.8 per cent and 4.6 per cent, respectively, in Mumbai and Bengaluru during the first six months of this year, according to Knight Frank.
The outlook for the next six months is stable in these three cities.
The leading global property consultancy on Friday released its Asia Pacific Warehouse Review: H1 2021.
The National Capital Region (NCR) witnessed a marginal warehouse rental increase of 1.1 per cent year-on-year (YoY) in H1 2021.
Mumbai and Bengaluru witnessed a decline of 7.8 per cent and 4.6 per cent, respectively, Knight Frank said in a statement.
"Despite decline, Mumbai remained the most expensive prime warehouse rental market in the country, attracting USD 2.93 per square meter per month," the consultant said.
Bengaluru is the second most expensive prime warehousing market in India, recording rental at USD 2.72/ Square meter per month. Rental for prime rental asset class in NCR recorded at USD 2.59/ square meter per month.
Despite a weak economy, rentals for prime warehouse markets across Asia-Pacific (APAC) region remained largely unchanged.
The APAC region saw a marginal fall of 0.1 per cent YoY in H1 2021. The outlook on the rents of prime warehouse markets in H2 2021 is expected to remain stable.
Shishir Baijal Chairman and Managing Director, Knight Frank India, 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, he said.
The warehousing markets in primary and secondary Indian markets are likely to remain resilient in coming months, Baijal said.
"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," he observed.
"This stalemate could well break towards the end of the 12-month period as vaccinations gather pace and occupiers eventually submit to higher rents due to inflationary pressures," Baijal said.
In its recent report, Knight Frank had projected that warehousing transactions for the top eight Indian cities (primary markets) would grow at a compound annual growth rate (CAGR) of 19 per cent to 76.2 million sq ft by financial year (FY) 2026 from 31.7 million sq ft in FY 2021.
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