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The latest RELEAP report by Anarock Retail highlights a surge in leasing activity, with demand surpassing supply for the third consecutive year.
Leasing Momentum and Vacancy Trends
In 2024, over 6.5 million sq ft of organised retail space were leased across major Indian cities, significantly outpacing new supply. This surge has led to a decline in mall vacancy rates to 7.8 per cent, a sharp drop from 15.5 per cent in 2021. Superior malls are now operating at near full capacity, driving up rental values in both malls and high streets.
Retailers are also shifting towards larger store spaces, with the highest leasing transactions recorded in the 2,000-5,000 sq ft category. Spaces between 1,000-2,500 sq ft remain in demand due to limited availability in premium malls.
Category Trends and Key Tenants
The Beauty & Personal Care and Departmental Store segments experienced an 11 per cent surge in H2 2024, reflecting evolving consumer preferences. Apparel & Accessories continue to dominate, contributing to 40 per cent of total leasing transactions.
Upcoming Mall Supply and Rental Trends
Between 2024 and 2028, India's retail sector is set to witness substantial expansion, with major cities gearing up for significant additions in organised retail space. Leading the surge is the National Capital Region (NCR), which accounts for 1.76 crore sq ft of upcoming supply, followed by the Mumbai Metropolitan Region (MMR) and Hyderabad. Among the most notable developments are World Mark, Aerocity in NCR, spanning 30 lakh sq ft, Ramsons Trends Square Mall in Bangalore, covering 10 lakh sq ft, and Orion Mall in Kokapet, Hyderabad, also extending across 10 lakh sq ft. These large-scale projects reflect the sector’s growing emphasis on high-quality retail infrastructure to meet increasing consumer demand.
High street rentals have witnessed a notable increase, with premium retail locations commanding high lease rates due to strong demand and limited availability. In Delhi, South Extension remains one of the most expensive high streets, with rental values ranging between Rs 800-1,000 per sq ft. Similarly, Linking Road in Mumbai continues to be a prime shopping destination, commanding lease rates in the same range. In Bangalore, MG Road remains a sought-after retail hub, with rentals ranging from Rs 250-350 per sq ft. The rising rental values reflect the growing preference for high street retail, driven by increased footfall, brand expansions, and the demand for premium shopping experiences.
The Road Ahead
With malls evolving into multi-faceted experience zones offering shopping, dining, and entertainment, retailers are adapting by securing larger spaces in premium locations. “Significant upcoming supply is planned in NCR, MMR, and Hyderabad, accounting for nearly 78 per cent of the total supply,” said Anuj Kejriwal, CEO & MD - Anarock Retail.
As rental values continue to climb, the Indian retail sector remains on a strong growth trajectory, poised to cater to an increasingly experience-driven consumer base.
