Mumbai, Delhi-NCR, Bengaluru among Asia-Pacific's top logistics markets as rents rise further

Mumbai, Delhi-NCR and Bengaluru have emerged among the Asia-Pacific region’s top 10 markets for annual logistics rental growth in the first half of 2026, underlining the strength of demand for warehousing and industrial space in India’s major economic centres.

Mumbai Metropolitan Region recorded the strongest annual increase among the three Indian markets, with prime logistics rents rising 5.3 per cent year-on-year, according to Knight Frank’s Asia-Pacific Logistics Highlights for H1 2026. Delhi-NCR followed closely with 5.2 per cent growth, while Bengaluru registered an increase of 4.4 per cent.

The Indian markets stood out against a more moderate regional environment. Across Asia-Pacific, logistics rents increased 1.2 per cent during the first half of 2026 compared with the preceding six months.

Mumbai leads Indian markets

Mumbai’s logistics rents increased 4.4 per cent during the first six months of the year to Rs 26 per sq ft per month. Vacancy declined to 13.5 per cent, while Knight Frank expects rents to continue rising over the next 12 months.

Delhi-NCR recorded a 2.8 per cent increase during the half-year period, taking prime rents to Rs 22.30 per sq ft per month. Its vacancy rate declined to 14.7 per cent.

In Bengaluru, rents rose 2.2 per cent during H1 to Rs 23.50 per sq ft per month. Vacancy stood at 17.6 per cent, although the outlook for rental growth over the coming year remained positive.

On an annual basis, Mumbai ranked fourth among the 18 APAC logistics markets tracked in the report, behind Brisbane, Singapore and Melbourne. Delhi-NCR was fifth and Bengaluru seventh.

Manufacturing, consumption drive demand

India’s performance has been supported by manufacturing expansion, domestic consumption and companies diversifying their supply chains.

Demand is coming from a broad mix of manufacturers, e-commerce companies, retailers and third-party logistics providers. Companies are increasingly seeking modern warehouses capable of handling automation, larger inventories and more complex distribution networks.

Investments in semiconductor manufacturing and other advanced industries are also expected to generate additional demand for specialised logistics infrastructure.

Knight Frank said the Indian logistics sector continued to demonstrate structural resilience, with demand remaining healthy even as occupiers become more selective about location, connectivity and the quality of properties.

Shift towards better warehouses

The report pointed to a wider shift in the Asia-Pacific logistics market from simply adding warehouse capacity towards improving the efficiency and quality of existing networks.

Companies are increasingly consolidating facilities, relocating operations and upgrading to higher-specification warehouses rather than expanding indiscriminately.

This is driving a “flight-to-quality”, with modern facilities offering stronger technology integration, sustainability features and better operational efficiency attracting greater occupier interest.

Across Asia-Pacific, 15 of the 18 markets monitored by Knight Frank recorded either stable or higher logistics rents during the first half.

India expected to retain momentum

Rental growth across the wider Asia-Pacific logistics market is expected to remain relatively subdued during the second half of 2026, with Knight Frank forecasting growth of below 2 per cent.

India, however, is expected to remain comparatively well positioned as manufacturing investment, consumption and supply-chain diversification continue to support demand.

With businesses increasingly prioritising institutional-grade facilities and efficient distribution networks, Mumbai, Delhi-NCR and Bengaluru are expected to maintain positive rental momentum over the near to medium term.