Average monthly rent of warehousing space up 4% in Delhi-NCR in first six months of 2023: Report

New Delhi: The average monthly rent of warehousing and logistics space in and around the national capital region rose 4 per cent annually to Rs 22.5 per square feet in the first six months of this year on higher demand, according to real estate consultant Vestian.

The leasing of warehousing and logistics space in Delhi-NCR increased 68 per cent to 4.7 million square feet in the January-June period this year as against 2.8 million square feet in the year-ago period.

"The Indian warehousing and logistics sector is sailing through global headwinds on the back of strong and sustainable fundamentals. Several mega infrastructure projects are planned across the country to improve connectivity and reduce transit time," Vestian Chief Executive Officer Shrinivas Rao said.

Across seven major cities, Vestian in a report on Wednesday said micro-markets of Delhi-NCR quoted the highest weighted average rentals of Rs 22.5 per sq ft a month compared to Rs 21.6 in the year-ago period.

Bengaluru closely followed at Rs 22 per sq ft a month, showcasing the city's prominence in the logistics sector. Rent in Bengaluru remained stable.

In Pune too, the monthly weighted average rentals were flat at Rs 20.9 per sq ft, up from Rs 20.8 in the first six months of the previous year.

Monthly rent in Hyderabad stood at Rs 20.5 per sq ft as against Rs 20.4 per sq feet in the six months of the previous year.

In Chennai, the monthly rent fell marginally to Rs 19.9 per sq ft from Rs 20.

Monthly rent in Mumbai grew 2 per cent to Rs 19.7 per sq ft from Rs 19.3.

In Kolkata, the rent was stable at Rs 18.2 per sq ft a month during the January-June period this year.

Vestian said the total leasing or absorption of warehousing and logistics space across seven major cities went up 17 per cent to 15.4 million square feet during January-June this year from 13.2 million square feet in the year-ago period.

Third Party Logistics (3PL) companies continued to be the major demand driver in the first half of 2023 with 26 per cent of the total share.

Engineering & manufacturing and FMCG companies accounted for 16 per cent and 11 per cent share, respectively.

Among cities, Delhi-NCR contributed 31 per cent of the total leasing/absorption during the first half of 2023 as against 21 per cent a year earlier.

This indicates a robust demand for warehousing and logistics facilities in and around Delhi, Noida, and Gurugram, which are prominent commercial and industrial hubs, Vestian said.

The leasing of warehousing and logistic space in Mumbai saw a 75 per cent increase to 3.8 million sq ft from 2.2 million sq ft.

Pune saw a marginal increase to 2.6 million sq ft from 2.5 million sq ft.

However, Bengaluru saw a slight dip in leasing to 1.7 million sq ft from 1.8 million sq ft.

In Hyderabad too, the leasing declined to 1.3 million sq ft from 1.4 million sq ft.

Chennai saw a drop of 67 per cent in leasing of warehousing and logistic space to 0.5 million sq ft during January-June 2023 from 1.5 million sq ft in the year-ago period.

Kolkata also saw a 23 per cent decline in demand to 0.8 million sq ft from 1 million sq ft during the period under review.

Headquartered in Chicago, Vestian has offices across the US, India, China, the UK, Sri Lanka, and the Middle East.