New Delhi, Aug 8 (NationPress) In the first half of 2025 (H1 2025), India's warehousing sector reported a robust absorption of 18.9 million square feet, while average rental values in the top seven cities remained consistent, fluctuating between Rs 18–31 per square foot per month, according to a report released on Friday.

Pune emerged with the highest rental rate of Rs 31 per square foot per month, spurred by robust demand from sectors like third-party logistics (3PL), automotive, engineering, and manufacturing, as noted by Vestian, a firm specializing in workplace solutions.

The report indicated that Pune experienced a substantial 34 percent increase on a half-yearly basis and 13 percent year-on-year, primarily driven by high-value transactions in key submarkets such as Khed and Chakan.

Scarcity of land has contributed to rising land prices, consequently elevating overall transaction values.

Conversely, Mumbai recorded the lowest rental rates at Rs 18 per square foot per month among the top seven cities, although rentals increased by 2 percent in H1 2025 compared to the latter half of 2024, while experiencing a 2 percent decline year-on-year.

The overall rental stability is attributed to a balanced demand-supply dynamic bolstered by new supply additions.

Rentals in Hyderabad remained unchanged at Rs 19 per square foot per month in H1 2025, reflecting a modest annual growth of 1 percent.

In contrast, Bengaluru saw a 5 percent annual decline despite a notable surge in demand, maintaining a rental rate of Rs 19 per square foot per month.

“The first half of 2025, although marked by a dip in investments, showcased strong demand across key markets. The expansion of multimodal logistics infrastructure and a focus on sustainable, tech-enabled solutions indicate long-term growth potential. Initiatives under the Gati Shakti plan and growing interest in tier-2 and tier-3 cities are anticipated to spur the next growth wave in the sector,” stated Shrinivas Rao, FRICS, CEO of Vestian.

Meanwhile, Chennai's rentals stood at Rs 25 per square foot per month in H1 2025, with a 3 percent half-yearly increase and a 2 percent annual rise.

Rentals in the NCR region saw a significant contraction of 10 percent annually and 4 percent compared to H2 2024, settling at Rs 21 per square foot per month.

This decline is attributed to approximately 60 percent of leasing occurring at rates below the city's average rent.

Simultaneously, Kolkata's rental value remained at Rs 21 per square foot per month, demonstrating a slight half-yearly decline of 1 percent but an annual growth of 8 percent, despite limited absorption activities, as per the report.