Manufacturing Momentum, 3PL Scaling, and "China+1" Diversification Propel Indian Metros to Top APAC Rental Growth Rankings
MUMBAI / NEW DELHI / BENGALURU — In an authoritative validation of India’s rapidly maturing industrial landscape, global property consultancy Knight Frank’s Asia-Pacific Logistics Highlights has placed Mumbai, Delhi-NCR, and Bengaluru firmly among the top 10 APAC markets for prime logistics rental expansion.
Amid a broader regional deceleration—where APAC prime logistics rents grew by an aggregate 1.2% half-year-on-half-year across 18 tracked cities—India's primary consumption and manufacturing gateways substantially outpaced their continental peers. Mumbai emerged as the fourth-highest rental growth market across the Asia-Pacific region, trailing only Brisbane, Singapore, and Melbourne, with prime logistics rental values climbing 5.3% year-on-year. Delhi-NCR secured the fifth spot regionally with an annual rental jump of 5.2%, while Bengaluru took seventh position with a 4.4% annual uptick.
Market-by-Market Performance and Rental Matrices
Mumbai Metropolitan Region (MMR): Prime warehousing rents in Mumbai climbed to ₹26.00 per sq. ft. per month, driven by acute land scarcity along prime expressway corridors and surging space take-up by quick-commerce dark stores, pharmaceutical exporters, and third-party logistics (3PL) aggregators
. Overall vacancy compressed to 13.5%, maintaining strong landlord pricing leverage across Bhiwandi, Taloja, and Panvel . Delhi-NCR: Sustained demand along the Western Peripheral Expressway (WPE), Bilaspur-Tauran, and Farukhnagar corridors anchored prime rents at ₹22.30 per sq. ft. per month
. The market recorded 2.8% half-yearly growth and 5.2% annualized appreciation, with vacancy easing to 14.7% as multi-client fulfillment centers absorbed newly completed Grade-A inventory . Bengaluru: Bolstered by the expansion of consumer electronics manufacturing, aerospace engineering, and semiconductor supply chains across Nelamangala, Hoskote, and Dobballapur, Bengaluru saw rents touch ₹23.50 per sq. ft. per month
. Vacancy settled at 17.6%, cushioned by steady institutional absorption .
"Flight to Quality" and the Structural 3PL Pivot
A central finding of the index is the decisive structural "flight to quality." Logistics occupiers across India are no longer seeking raw, unorganized godowns; instead, enterprise tenants are aggressively consolidating disparate operations into integrated, high-throughput Grade-A campuses.
Third-party logistics (3PL) providers remained the single largest demand driver across all three metropolitan zones, accounting for over 38% to 42% of total net leasing uptake
"India's logistics real estate sector continues to demonstrate outstanding structural resilience," stated Shishir Baijal, Chairman and Managing Director of Knight Frank India. "While rental growth in several East Asian logistics centers has moderated due to high inventory overhangs, India’s narrative is propelled by genuine end-user absorption. Sustained domestic consumption, government-backed infrastructure deployment under PM Gati Shakti, and systematic supply-chain formalization are driving corporate occupiers to prioritize connectivity, clear heights, floor loads, and ESG compliance over baseline leasing costs
Institutional Capital and Forward Outlook
The steady rental trajectory across Mumbai, Delhi-NCR, and Bengaluru is accelerating institutional capital recycling. Global private equity platforms, sovereign wealth funds, and domestic developers—including Welspun One, ESR, TVS ILP, and IndoSpace—are expanding capital outlays to develop large-format, tech-enabled logistics parks
With major intermodal corridors like the Western Dedicated Freight Corridor (WDFC) and expressways nearing comprehensive operational integration, Knight Frank projects Indian industrial real estate absorption to maintain positive upward momentum through the second half of 2026, anchoring the nation as the primary growth engine for APAC logistics investment