Mumbai, March 29, 2025: According to Knight Frank’s Asia-Pacific Logistics Highlight H2 2024 the Asia-Pacific (APAC) logistics market saw marginal rental growth of 0.2% in year-on-year (YoY) terms marking a significant slowdown. The study noted that Delhi – NCR at 2.8%, Mumbai at 2.3% and Bengaluru at 1.5% recorded YoY rental growth higher than regional average.
Though 14 of 17 tracked cities observed rent increases in H2 2024, overall rental growth slowed due to challenging conditions in Chinese Mainland, especially in Beijing and Shanghai. Rents for logistics spaces in the region registered an average of 0.2% growth in 2024, a considerable deceleration from the 7.0% clocked in 2023, and down from the 2.0% increase from six months ago. Melbourne’s market led the region in terms of rental growth which rose 6.7% in 2024. Rental growth was observed to be highest in the established East and Southeast precincts of the city, where the lack of development land has limited the delivery of new supply.
Despite slowdown in occupier activity, rent growth in Bengaluru, Mumbai, and NCR continued in H2 2024, maintaining levels. However, elevated vacancy levels in NCR and Bengaluru, resulting from speculative development, could potentially dampen the rent growth in these areas.
Delhi-NCR is positioned 6th in the APAC logistics market based on annual rental growth. At INR 21.07/ sq ft/ month, the city’s rents grew at 2.8% YoY. The vacancy level in the market now stands at 14.5%.
Mumbai is on 7th position in the APAC logistics market in terms of annual rental growth. With a YoY growth of 2.3%, the city’s rents now stand at INR 23.94 / sq ft/ month. The vacancy level grew to 11.8% in H2 2024.
Bengaluru spotted at 10th rank in the APAC logistics market based on annual rental growth in H2 2024. Rents in the city grew at 1.5% YoY to INR 22.13 /sq ft/ month. Vacancy level stood at 18.9%.
APAC PRIME LOGISTIC RENTAL GROWTH IN H2 2024 and OUTLOOK
| CITY | RENTAL GROWTH | 12 MONTH RENTAL OUTLOOK |
| Melbourne | 6.7% | ↑ |
| Brisbane | 6.6% | ↑ |
| Greater Kuala Lumpur | 5.0% | → |
| Sydney | 3.9% | → |
| Greater Jakarta | 3.8% | → |
| Delhi NCR | 2.8% | → |
| Mumbai | 2.3% | → |
| Vietnam SKER | 1.7% | → |
| Manila | 1.6% | ↑ |
| Bengaluru | 1.5% | → |
| Bangkok | 1.3% | → |
| Taipei | 0.2% | ↑ |
| Singapore | 0.0% | ↑ |
| Auckland | 0.0% | → |
| Hong Kong SAR | -3.2% | ↓ |
| Shanghai | -14.0% | ↓ |
| Beijing | -15.0% | ↓ |
Source: Knight Frank Research| Note: India data relates to Q3 2024
Shishir Baijal, Chairman and Managing Director, Knight Frank India said, “The healthy GDP growth forecast is expected to maintain a dynamic business environment and support occupier activity throughout 2025. With 2 million sqm becoming available in 2025, the anticipated demand is expected to be sufficiently met. Government’s focus on the manufacturing sector is proving successful, resulting in healthy demand from this sector. The robust business environment, diversified warehousing demand, and growing institutional interest are likely to help the market sustain its momentum in the near to medium term.”
Tim Armstrong Global Head of Occupier Strategy and Solutions, Knight Frank, says, “As the world braces for Trump 2.0, the realignment of supply chains is likely to gather pace in response to planned tariff increases. China-plus strategies, consequently, are expected to take on added urgency as manufacturers focus on further diversifying bases in Southeast Asia and India, strategically leveraging these locations to friend shore operations. Occupiers will have to tread a strategic tightrope, focusing on cost management while selectively evaluating their logistics footprint. This places emphasis on logistics hubs that are well connected to major trade routes. The evolving geopolitical landscape and preference for modernised distribution facilities are expected to continually drive demand for well-located, efficient prime logistics spaces in the region.”