News
Cap rates stabilize with 2.9 million sq.ft warehouse supply expected in Mumbai


Mumbai, July 28, 2023: Colliers released its Asia Pacific Cap Rates Report | Q2 2023, which
reflected most markets across the Asia Pacific region have showcased resilience over the
past quarter. The office market continues to make waves with the back-to-office shift, but
investors are still displaying a cautious approach given the global economic volatility. Office
rentals have remained flat QoQ and vacancy levels have risen slightly.
The industrial segment, on the other hand, is witnessing augmented demand, driven by the
flourishing ecommerce, manufacturing, retail, FMCG and 3PL sectors.


“The rentals across major micro- markets have remained unchanged. Absorption and vacancy
levels have remained stagnant Q-o-Q. However, with larger institutional players warehousing is
seeing traction and offering better returns to investors as compared to other asset classes.”, says
Ajay Sharma, Managing Director, Valuation Services.
Asia | Office | Retail | Industrial | ||||||
Low | High | QoQ | Low | High | QoQ | Low | High | QoQ | |
Mumbai | 7.75% | 8.75% | Up | 7.50% | 8.75% | Flat | 7.00% | 8.50% | Down |
Bengaluru | 8.50% | 8.75% | Marginally up | 9.75% | 10.75% | Marginally up | 7.00% | 7.25% | Flat |
While the cap rate still remains flat, the retail and hospitality sectors have been making a
healthy comeback post-pandemic, owing to increased consumption, higher disposable
income, and pent-up demand for business and leisure travel. “The Grade A space demand
has remained consistent as previous quarters though the occupiers are taking cautious
calls on the locations where the new stores are being opened leading to challenging
environment in certain micro-markets.”, adds Sharma.
Mumbai has emerged as the market with most movement, reinforcing the investor
sentiment.
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