Gross leasing activity grows by nearly five times q-o-q

• Bengaluru’s retail leasing activity surged in Q4 with the opening of a new mall in the Suburbs submarket and increased demand for space in existing quality malls. Some of the prominent tenants leasing space include Lulu Daily Hypermarket, D Mart, Westside and KFC.
• High streets in the city experienced sustained leasing momentum driven by healthy demand from anchor tenants like All Mart, Star Bazaar, Westside, Azorte and Kling Brewery taking up space at prominent locations like Bellary Road and JP Nagar.

One new mall is completed in Q4

• M5 Ecity Mall opened in Electronic City Phase II, pushing the city’s retail stock to 14.62 million sq ft. However, two malls in the Secondary and Suburbs submarkets were downgraded from the stock due to quality and the conversion of retail space to office.
• Bengaluru is set to add nearly 1.1 million sq ft of new mall space by end-2025, with a premium mall, Brigade Cornerstone Utopia, coming up on Varthur Road.

Rents and capital values grow marginally q-o-q amid healthy demand for quality space

• Mall rents and capital values increased by 1.6% and 2.1% q-o-q, respectively, driven by the new mall completion and sustained retailer activity in the existing superior-grade malls.
• Rents rose on account of the increased demand pushing up closure rents in the superior grade malls in the Prime and Suburbs submarkets. In the Secondary submarket, rents were largely stable but went up q-o-q due to the removal of an under-performing mall.

Outlook: Leasing activity to remain steady in tandem with upcoming supply

• Overall mall rents in the city are likely to strengthen with new and premium malls commanding higher rents.
• Expansion of residential corridors in the city is expected to enhance the growth of new high streets, including neighbourhood retail centres.