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The warehousing sector in eight prominent Indian cities experienced a 2-5 per cent annual increase in average monthly rents during the January-March period, driven by strong demand, according to a report by Knight Frank India. Mumbai, the largest warehousing market, recorded a 5 per cent rise in rents to INR 24.7 per sq ft, while Kolkata saw a similar increase to INR 24.8 per sq ft. Ahmedabad, Pune, Delhi-NCR, Chennai, and Bengaluru registered rent growth between 3-4 per cent, while Hyderabad experienced a more modest 2 per cent rise. The report highlighted that the rent growth momentum, which began in 2021, has persisted due to inflationary pressures on construction materials and a tight supply scenario.
The average monthly rent for warehousing spaces across eight key Indian cities rose by 2-5 per cent annually during the January-March period, supported by robust demand, as stated by real estate consultancy firm Knight Frank India. The report underscored that the upward rent trajectory, which commenced in 2021 due to inflationary pressures on steel and cement prices, continued into the first quarter of 2025. Advertisement
Mumbai, the largest warehousing market, recorded a 5 per cent annual increase in average monthly rents, reaching INR 24.7 per sq ft, up from INR 23.5 per sq ft in the same period of the previous year. Kolkata also witnessed a 5 per cent rise in rents, with the average increasing to INR 24.8 per sq ft from INR 23.7 per sq ft.
In Ahmedabad, monthly rents grew by 4 per cent, climbing to INR 18.3 per sq ft from INR 17.6 per sq ft. Meanwhile, Pune, Delhi-NCR, Chennai, and Bengaluru each experienced a 3 per cent rise in average rents. Pune's monthly rent increased to INR 26.8 per sq ft, Delhi-NCR's to INR 21.2 per sq ft, Chennai's to INR 24 per sq ft, and Bengaluru's to INR 22.5 per sq ft.
Hyderabad registered the lowest growth, with a 2 per cent increase in monthly rent, reaching INR 20.9 per sq ft in the January-March period compared to INR 20.5 per sq ft a year earlier.
Knight Frank stated that rent growth had been a persistent challenge for the warehousing market over the past decade, but the recovery that started in 2021 has continued. The report noted that rent levels remained steady as transaction volumes surged, supported by tight supply conditions since the start of 2024. This trend persisted into the first quarter of 2025, with all markets responding positively to higher occupier demand.
On the demand front, the report revealed that the leasing of warehousing spaces grew by 50 per cent to 16.7 million sq ft in the January-March period, up from 11.1 million sq ft in the corresponding period of the previous year. The eight cities collectively house a warehousing stock of 495 million sq ft, with Mumbai accounting for the largest share at 31 per cent, followed by the NCR with 22 per cent.
Mumbai, Kolkata, and Ahmedabad led the rent growth, with Mumbai maintaining its position as the largest warehousing hub. With transaction volumes on the rise and demand showing no signs of abating, industry experts anticipate further rental appreciation in the coming quarters, particularly in key markets with limited supply availability.
Source - PTI
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