Mumbai, 1st October 2020: Knight Frank, a leading global property consultancy, released its latest Asia Pacific Warehouse Review report, which expects an average rental growth of between 3% to 5% by the end of 2020 for warehouses across the region. The report tracks the prime warehouse rental performance across 17 key cities in the Asia Pacific region. Despite spread of COVID-19, cities registered an average rental change of -0.02% year on year –in H1 2020. The report cited that 5 of 17 cities prime warehouse rents to increase over the next 12 months, including those in National Capital Region (NCR), Mumbai, Bengaluru, Taipei, and Shanghai.
In H1 2020, 12 of 17 cities recorded stable or rising rents in prime warehouse and logistics markets. The warehouse sector across Mumbai, NCR, and Bengaluru, which accounts for around two-thirds of all the warehouse stock in India, recorded stable rental growth within the first six months of 2020.According to the recent ‘India Warehousing Market Report – 2020’, a study on asset class performance across 22 Indian cities by Knight Frank India, the warehousing sector had seen a strong demand growth of 44% CAGR, with transactions increasing from 13.9 mnsq ft in FY 2017 to 41.3 mnsq ft in FY 2020.
On the current context and outlook on the prime warehouse rental performance in India, Balbirsingh Khalsa, National Director Industrial & Logistics, Knight Frank India said, “The pandemic has led to a break in the supply chain across industries in the country that has resulted in an increasing demand for storage space from the daily necessities, electronics and FMCG sectors. A balance in demand-supply dynamics is expected to support the sustenance of an increase in rental growth. Due to the continued shift of the tenancy mix, it is probable that all cities across India to remain stable till the year-end.”
Asia-Pacific Prime Warehouse Rents
|
City |
Country |
USD/sq m/month |
6-month % change (H2 2019 – H1 2020) |
Forecast next 12 months |
|
Brisbane |
Australia |
6.5 |
-0.40% |
Stable |
|
Melbourne |
5.8 |
0.00% |
Stable |
|
|
Sydney |
7 |
0.00% |
Stable |
|
|
Tokyo* |
East Asia |
12.8 |
4.20% |
Stable |
|
Beijing |
8.3 |
-2.50% |
Stable |
|
|
Guangzhou |
5.4 |
-1.80% |
Stable |
|
|
Shanghai |
6.8 |
3.00% |
Increase |
|
|
Hong Kong |
26.2 |
-3.40% |
Decrease |
|
|
Taipei |
11.8 |
0.90% |
Increase |
|
|
Bengaluru |
India |
2.8 |
0.00% |
Increase |
|
Mumbai |
3.4 |
0.00% |
Increase |
|
|
NCR |
3.4 |
0.00% |
Increase |
|
|
Jakarta |
Asean |
4.5 |
0.00% |
Stable |
|
Kuala Lumpur |
4.8 |
0.00% |
Stable |
|
|
Singapore |
13.8 |
-0.60% |
Stable |
|
|
Bangkok |
5.1 |
0.20% |
Stable |
|
|
Manila |
4.7 |
0.00% |
Stable |
Source: Knight Frank Research / *Sanko Estate/ The above cities does not indicate any ranking order/ Prime = Grade A Warehouse
On the rental warehouse performance in APAC region, Tim Armstrong, head of occupier services & commercial agency, Asia Pacific at Knight Frank said, “The outlook for industrial markets remains resilient due to robust demand from the e-commerce and essential goods sectors, as well as additional requirements for inventory storage to mitigate supply chain disconnects.”
Highlights of the report:
· Mumbai, NCR and Bengaluru witnessed growth in demand for storage space for daily necessities; electronics and FMCG sectors were given a break in supply chains across the country.
· 12 of 17 cities recorded stable or rising rents in H1 2020.
· Market conditions for 16 of the 17 cities tracked are expected to remain stable or improve over the next 12 months. The positive outlook for growth in the second half of 2020 is due to a higher space appetite from e-commerce players and essential commodities.
· Tokyo recorded the highest half-on half rental growth at 4.2%, due to healthy take-up rates and the lack of available prime assets within the city.
· Shanghai warehouse markets recorded the healthiest rental growth compared to Beijing and Guangzhou, at 3% half-on-half, led in part by a pickup in storage demand from cold chain operators.
