Retail space demand in shopping malls rises 15% in Apr-Jun

Leasing of retail spaces in shopping malls rose 15 per cent annually during the April-June period to 6.12 lakh square feet across eight major cities on better demand from retailers, according to Cushman & Wakefield.

Real estate consultant Cushman & Wakefield India data showed that the demand for retail space on major high streets across these eight major cities increased 4 per cent annually to nearly 14 lakh square feet during the second quarter of the 2024 calendar year.

As per the data, the leasing activities in shopping malls rose to 6,12,396 square feet during April-June 2024 from 5,33,078 square feet in the year-ago period. High street locations saw a growth of 4 per cent in leasing to 13,89,768 square feet from 13,31,705 square feet during the period under review. The leasing data includes all types of shopping malls- Grade A and Grade B — and also all prominent mainstreets. These eight cities are — Delhi-NCR, Mumbai, Chennai, Kolkata, Bengaluru, Hyderabad, Pune and Ahmedabad.

Commenting on the report, Saurabh Shatdal, Head Retail and Managing Director, Capital Markets, Cushman & Wakefield, said, “The second quarter of 2024 was marked by a strong demand for both Grade A malls and high street retail. The growth in both formats underscores the vibrancy of India’s retail landscape.”

While high street rental growth has seen a notable increase, the upcoming Grade A mall supply of 4.5 million (45 lakh) square feet might stabilise rental costs in the short to medium term as demand-supply dynamics shift to an extent, he added.

“However, we anticipate the main street activity to remain healthy. Additionally, the dominance of domestic brands, accounting for 53 per cent of leasing volume, along with the strong performance of fashion and F&B (food and beverages) highlight the evolving retail preferences in India,” Shatdal said.

The consultant highlighted the continued dominance of main-street retail leasing, owing to limited new mall openings and a strong demand for high-quality retail spaces.

Retailers are increasingly focusing on main streets in prominent locations across India, with emerging clusters forming around residential and commercial hubs, it added.

“This trend is reflected in leasing activity with high street leases accounting for 70 per cent of total leases in Q2 (April-June) 2024, compared to 30 per cent for mall leases,” C&W said.

The rental growth across prominent main streets in Q2 of 2024 further underscores their growing appeal.

Kolkata, Bengaluru, Hyderabad and Mumbai have all experienced significant year-on-year rental increases, demonstrating strong demand and potential for high-street retail in the country.