This hike has led to a reduction in vacancy levels in malls to 7.8%, causing rental values to increase
Bengaluru: In 2024, over 6.5 million sq. ft. of organised retail space were leased across major cities, surpassing the supply of new stock significantly, according to a report by ANAROCK Retail. This has led to a reduction in vacancy levels in malls to 7.8%, causing rental values to increase.
Retailers have shifted their preferences to larger stores, with spaces admeasuring between 2,000-5,000 sq. ft. recording the highest share of transactions. Stores ranging from 1,000 to 2,500 sq. ft. are seeing increased demand due to limited availability in malls.
Across categories, beauty and personal care as well as department store segments witnessed an 11% surge in the second half (H2) of 2024. Apparel and accessories continue to dominate, accounting for 40% of leasing transactions in H2 2024.
The report also finds that vacancy in prominent malls is continuing to decline, with superior malls operating to nearly 100% capacity. Vacancy rates have dropped from 15.5% in 2021 to 7.8% in 2024.
Prime retail locations continue to command strong lease rates. MG Road, Bengaluru is priced at Rs 250-350 sq. ft., while South Extension, Delhi, and Linking Road, Mumbai, both range between Rs 800-1000 sq. ft. Leading tenants in organised retail include Lifestyle International, Reliance Projects & Property Management Services, and PVR Ltd.
Between 2024 and 2028, approximately 377 million sq. ft. of Grade A retail space is expected across India’s top seven cities. The NCR region leads with 46.76% of the total supply, followed by MMR (16.74%) and Hyderabad (14.85%). Bengaluru contributes 13.87%, while Kolkata (3.98%), Chennai (3.16%), and Pune+PC (0.64%) account for smaller shares.
“Significant upcoming supply is planned in NCR, MMR, and Hyderabad, accounting for nearly 78% of the total supply,” said Anuj Kejriwal, CEO & MD of ANAROCK Retail. “Notable mall developments include World Mark, Aerocity with 30 lakh sq. ft., Ramsons Trends Square Mall, Bangalore with 10 lakh sq. ft., and Orion Mall, in Kokapet, Hyderabad – also with 10 lakh sq. ft.”
“Rental values across malls and high streets are on the rise and are expected to continue their upward climb until new good quality supply is added,” he further added.
