Warehouse rental values remain largely stable across locations: CBRE

BENGALURU: Warehouse rental values in the Western and Southern Corridors of Bangalore remained largely stable; however, the East Corridor witnessed a marginal rental appreciation in the range of 2-3% when compared to H1 2016, said a recent report by CBRE.

"On the other hand, due to scarcity of ready-to-move options, the Northern Corridor of Bangalore witnessed rental appreciation in the range of 22-23% on a half yearly basis," said the report.

In Chennai, rental values witnessed a marginal decline in the Western Corridor as developers were keen on reducing the existing vacancy levels, on account of the large anticipated supply in the next few months. Going forward, the announcement of large scale logistics parks by prominent developers such as Embassy Group, Casa Grande, Motherson, etc., is expected to further exert rental pressure on the region.

Similarly, rental values across locations in the south Chennai micro-market witnessed a marginal decline of about 1-2%, when compared to H1 2016. However, rental values in north Chennai, which saw steady rental corrections in the past two years, remained stable.

Rental values across cities in the west also remained steady. In Mumbai, rentals for Grade A warehouses in Bhiwandi were estimated in the range of Rs 11-16/sq. ft./month, while in Panvel they were largely stable in the range of Rs 20-25/sq. ft./month.

The industrial hubs of Sanaswadi and Ranjangaon in Pune, which observed healthy leasing activity, recorded a rental growth of 9-10% compared to H1 2016, while values remained steady in Chakan, Talegaon, Pimpri and Chinchwad.

Similarly, rental values in warehousing hubs in Gujarat spread across locations such as Changodar, Narol, Sanand, Odhav, with the exception of Aslali and Aslali Extension where values increased by 6-8% when compared to H1 2016, owing to strong occupier interest.