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India's key logistics markets are expected to maintain their positive momentum in the near to medium term, supported by sustained manufacturing activity, domestic consumption and supply-chain diversification, even as occupiers across Asia-Pacific become more selective about the quality and efficiency of logistics space, Knight Frank said in its latest report.
Knight Frank expects APAC logistics rents to remain broadly stable in the second half of 2026, with rental growth likely to remain below 2 per cent. However, India is expected to remain relatively well positioned as manufacturing investments and supply-chain diversification continue to support demand for modern logistics facilities. Mumbai, Delhi-NCR and Bengaluru have emerged among the top 10 APAC markets for annual logistics rental growth in the first half of 2026. Mumbai recorded the strongest growth among the three, with rents rising 5.3 per cent year-on-year (YoY), followed by Delhi-NCR at 5.2 per cent and Bengaluru at 4.4 per cent. "India's logistics sector continues to demonstrate strong structural resilience, supported by sustained manufacturing activity, domestic consumption and the ongoing diversification of supply chains," said Shishir Baijal, International Partner, Chairman and Managing Director, Knight Frank India. He added that healthy rental growth across the three markets reflected sustained occupier demand, with the market increasingly becoming selective about location, connectivity and asset quality. Mumbai recorded 4.4 per cent rental growth during H1 2026, with prime rents at INR 26 per sq ft per month and vacancy declining to 13.5 per cent. Knight Frank said the market remained balanced, with the 12-month rental outlook pointing to further growth. Delhi-NCR saw rents rise 2.8 per cent during H1 2026, while prime rents stood at INR 22.30 per sq ft per month. Vacancy declined to 14.7 per cent, with the market also assessed as balanced and the 12-month outlook indicating further rental growth. Bengaluru recorded 2.2 per cent rental growth during the first half, with prime rents at INR 23.50 per sq ft per month. Vacancy stood at 17.6 per cent, while the market remained balanced and the rental outlook positive. Across APAC, 15 of the 18 tracked cities recorded stable or rising rents in H1 2026. Leasing activity was increasingly driven by relocations, consolidation and upgrades, as occupiers prioritised operational efficiency and network performance. Knight Frank said this was contributing to a "flight-to-quality", with demand shifting towards modern warehouses offering better functionality, technology integration and sustainability credentials. For India, continued investments in manufacturing, including semiconductor and advanced manufacturing supply chains, are expected to provide an additional demand catalyst for logistics real estate. (ANI)
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