Dedicated locality research platform
Dedicated locality research platform
Enter your email address and you will receive
a link to reset your password
A report by Cushman & Wakefield, a leading real estate consultancy, has revealed interesting trends in the Indian retail sector for the first quarter (Q1) of 2024.
The report forecasts a significant increase in mall space this year, with nearly 8 million square feet (approximately 743,200 square metres) expected to open across the country. Over a third of this new space will be categorised as "superior" malls, offering a high-end shopping experience. Hyderabad is expected to be a major player in this growth, with nearly half of the new superior mall space planned for the city, totaling around 4 million square feet (approximately 371,600 square metres).
The report also highlights a positive trend for existing malls. Vacancy rates in Grade-A malls (high-quality malls) have declined in several cities, including Delhi NCR, Pune, and Chennai. Limited new mall openings in Q1 2024, contributing only a fraction of the expected annual total, helped create a situation where demand for space outpaces supply. Superior malls, in particular, continue to boast very low vacancy rates, typically in the single digits across major cities.
With limited space available in malls, retailers are increasingly turning their attention to high streets - prominent shopping areas with street-front stores. The report highlights a rise in demand and rental growth in high streets across key Indian cities. New retail clusters are also emerging around residential and commercial hubs, offering additional options for both shoppers and businesses.
The report dives into city-specific trends as well. Ahmedabad observed strong leasing activity, with prime locations experiencing significant rental hikes of 20-30% year-over-year.
Bengaluru's prominent high streets reported high demand, leading to rental appreciation of around 10% per quarter.
Chennai witnessed a surge in high street leasing volume, reaching nearly 0.12 million square feet in Q1, while malls are expected to see marginal rental growth due to limited space availability. Delhi-NCR mirrored the strong performance with key high streets in Gurugram and South Delhi experiencing rental growth of up to 10% year-over-year. Hyderabad reported high demand for both malls and high streets, with prominent locations enjoying rental increases of 15-25% in recent quarters. Leasing activity on high streets in Hyderabad was brisk, reaching nearly 491,000 square feet in Q1. Kolkata saw modest growth in leasing activity with slight rental increases on high streets, reaching around 40,000 square feet in Q1.
Mumbai is anticipating new mall openings in suburban areas, while city-wide mall vacancy rates are expected to remain stable. High street rentals in Mumbai are also showing signs of growth, with prominent locations experiencing a rental appreciation of 2-3% from last quarter and 7-12% in annual terms. Additionally, close to 1.2 million square feet of Grade A mall space is expected to be operational in Mumbai by the end of 2024.
Pune reported a significant increase in mall leasing compared to last year, with Grade-A malls witnessing close to 0.19 million square feet of leasing in Q1. City-wide average rentals in Pune's malls increased by 6-12% year-over-year due to new mall openings. High street rentals in Pune also witnessed a rise of 7-8% from last year due to robust leasing activity, particularly around Baner and NIBM road.
Overall, the retail market in India appears to be in a healthy state. The combination of new mall openings, improving occupancy rates in existing malls, and a growing high street presence suggests a positive outlook for the rest of 2024.
Propscience is India’s dedicated property news portal. We cover the latest events, news, trends, deals, new launches and more.
All our services and tools are completely free of cost and available 24X7!
