Mumbai region sees highest average rental growth of warehousing space at 9.4% in 2022: Vestian-FICCI

Mumbai region witnessed maximum growth in weighted average rental of warehousing space at 9.4 per cent during the last calendar year on better demand for high-quality assets and rise in input costs, according to a report by Vestian and FICCI.

Property consultant Vestian and industry body FICCI on Thursday released a report 'Warehousing & Logistics Sector in India'.

"With improving occupier and investor sentiment in 2022, coupled with consistent demand for high-quality assets and an upsurge in input expenses, rental values for warehousing space saw a fair rate of increase across the key micro-markets in the country," Vestian-FICCI said in the report.

On the weighted average rental value front, Mumbai region witnessed a growth of 9.4 per cent during the 2022 calendar year when compared with the rental values a year ago in 2021.

According to the report, the weighted average rental of warehousing space in Bengaluru rose a 6.2 per cent in Bengaluru to Rs 20.5 per square feet per month. Chennai saw a 3.8 per cent growth in weighted average rental to Rs 22 per square feet per month, while Mumbai witnessed a 9.4 per cent increase in rental to Rs 22.1 per square feet a month.

The weighted average rental of warehousing space in Pune rose 9.1 per cent to Rs 24 per square feet per month. In Delhi-NCR, the rental increased by 6.8 per cent to Rs 23.4 per square feet per month.
Hyderabad saw an increase of 5.8 per cent in 2022 to Rs 20 per square feet per month, while Kolkata witnessed 6.4 per cent rise to Rs 21.7 per square feet a month.

"India's warehousing and logistics sector has not only shown remarkable resilience in the face of challenging economic headwinds but in fact the consistent growth in the absorption of warehousing space and the increasing institutional investment in this asset class in the past few years indicates the strong confidence of stakeholders and investors in the industry's long-term growth prospects," Vestian CEO Shrinivas Rao said.

The sector will continue its upward trajectory in the forthcoming period, driven by the e-commerce boom, shift of unorganised to organised retail and strong policy making by the government across sectors, notably the manufacturing sector, he added.

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