Chennai records robust leasing activity in Q2 2024

• In Q2 2024, a net absorption of 0.21 million sq ft was recorded. The Suburbs submarket accounted for the majority of leasing activity, representing 97% of the total.
• The leasing activity in the quarter was led by F&B, home furnishing and entertainment. Ilem Japan opened its first store in Chennai at Palladium Mall, Velachery.

One mall comes on stream during the quarter

• A single mall, S3 Mall, was completed in the Suburbs submarket, bringing the city’s Grade A retail mall stock to 7 million sq ft at end-Q2 2024.
• In the next five-years (2024 to 2028), 5.47 million sq ft of new mall supply is projected to come on stream, mostly in the Suburbs.

Rents remain stable across all existing malls

• The overall rents increased by 0.2% in Q2 2024 due to the addition of S3 Mall and the withdrawal of two malls from the stock. Otherwise, the rents were mostly unchanged across all existing malls.
• Premium-quality assets remain in demand and see their rents holding up. However, the high streets with visible locations seem to have better traction with rent growth than malls. Capital values are also following a similar trend.

Outlook: Leasing is projected to stay strong

• The demand for leasing space is expected to remain strong, driven by the expansion of both local and national retail chains in the city. The leasing market is expected to be driven by both shopping malls and high streets in the future.
• In the next five years (2024 to 2028), mall supply of 5.47 million sq ft is projected to come on stream. The major mall completions in next five years include Lulu Mall and Forum Mall in the OMR.