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Retail space leasing activity across eight major Indian cities witnessed a 6% year-on-year decline in the April to June quarter, clocking 2.24 million sq. ft. as per Cushman & Wakefield. While high-street locations led with 55% of the share, shopping malls contributed 45%. Cities like Ahmedabad, Bengaluru, and Delhi-NCR recorded steep drops, while Mumbai, Pune, and Chennai showed notable growth. The vacancy in premium malls is easing, and a robust pipeline of around 4 million sq. ft. of Grade A retail space is expected to enter the market in the second half of the year.
Retail leasing activity across India's eight key cities witnessed a marginal slowdown in the past quarter, as the total area leased stood at 2.24 million square feet down by 6% compared to the same period last year, which had seen 2.39 million square feet being absorbed. This dip in demand affected both malls and high-street locations, with shopping malls accounting for 1.01 million sq. ft. (45% share), while high-street retail continued to lead with 1.23 million sq. ft. (55% share) of leasing volume. Advertisement
Suvishesh Valsan, Head of Research for India at Cushman & Wakefield, highlighted that premium shopping malls are seeing reduced vacancy levels, indicating strong absorption in high-quality properties. He pointed out that nearly 4 million square feet of new Grade A supply is anticipated in the second half of the year, largely concentrated in metro cities like Mumbai, Delhi-NCR, and Hyderabad.
Despite the overall dip, some cities stood out with rising demand. Mumbai led the growth trend with retail leasing more than doubling to 0.52 million sq. ft. from last year's 0.20 million sq. ft. Pune followed with leasing rising from 0.09 million sq. ft. to 0.23 million sq. ft., while Chennai also saw an uptick, growing from 0.10 million sq. ft. to 0.16 million sq. ft.
However, a sharp fall in leasing activity was observed in cities such as Ahmedabad, which witnessed a 63% drop to just 0.04 million sq. ft., and Bengaluru, where leasing contracted by 44% to 0.18 million sq. ft. Delhi-NCR saw a 41% fall to 0.30 million sq. ft., Hyderabad declined 22% to 0.76 million sq. ft., and Kolkata slipped by 23% to 0.05 million sq. ft.
This cautious leasing sentiment in several cities could be attributed to ongoing macroeconomic considerations, consumer sentiment shifts, and localized saturation in certain micro-markets. However, the long-term outlook remains optimistic, bolstered by upcoming quality supply and strengthening demand in emerging zones.
Source PTI
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