APPD Market Report Article


May 26, 2024

Dr Samantak Das, Head of Research, India


INR 304


Net absorption of 0.1 million sq ft in 1Q24

  • Suburbs led the leasing demand in the quarter. Beauty and cosmetic brands like Nars Cosmetics, Reliance Retail’s Tira, Tata Trent’s Misbu and Lovechild Masaba opened their first stores in NCR in 1Q. Daily needs and grocery store chains like Le Marche and the newly-launched Foodstories leased large areas in Prime South malls.
  • Delhi NCR continued to remain the top choice for international brands entering India. Brands like Singapore’s Limited Edt and Italy’s Golden Goose leased areas in Prime malls to open their first stores in the country. With fresh leasing, the overall vacancy came down further and now stands at 12.9% at the end of the first quarter, down by 40 bps q-o-q.

No retail completions in the quarter

  • No new retail developments were completed in the first quarter of 2024, as such Delhi NCR’s retail stock remained unchanged at 26.7 million sq ft.
  • Four retail developments with a combined leasable area of 2.3 million sq ft are likely to go operational in the coming months of 2024. These developments include Athena in Gurgaon, Boulevard Walk The Mall and Sikka Mall of Noida, both in Noida, and Unity One at Netaji Subhash Place in Delhi. 

Overall rents up by 0.3% q-o-q

  • With vacancy levels coming down, the overall rent went up slightly. The Prime Others submarket saw the highest rent growth, with rents going up by 1.2% compared to the previous quarter. Rents in the Prime South and the Suburbs submarkets remained largely stable.
  • One retail investment transaction was recorded in the quarter, wherein Lake Shore India, backed by the Abu Dhabi Investment Authority (ADIA), acquired Shipra Mall in Ghaziabad from Trident Realty.

Outlook: Retail demand to remain healthy, backed by strong supply

  • Leasing is expected to remain strong with retailers expanding their footprint and new international retailers entering India, supported by the availability of new Grade A supply. Sectors like Fashion and Apparel, F&B and Entertainment are expected to lead in terms of leasing. With consumer spending expected to go up, malls should continue to witness high footfall and increased sales.
  • A supply of 2.3 million sq ft across four new retail developments is likely to become operational in the coming months of 2024. A majority (78%) of this new supply is in the Suburbs submarket. With quality supply coming on stream, rents and capital values are expected to go up, too. Institutional investors are likely to continue to acquire Grade A assets and expand their portfolios.

Note: Delhi Retail refers to Delhi NCR's prime retail market.

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