APPD Market Report Article


May 26, 2024

Dr Samantak Das, Head of Research, India


INR 281


Demand reduces significantly due to lack of relevant vacancy

  • In 1Q24, demand in the Mumbai retail market witnessed a significant fall q-o-q since there were no new completions and relevant vacancy was low. Still, net absorption stood at 45,400 sq ft due to healthy leasing activity witnessed in the Prime North and Suburbs submarkets.
  • Most of the leasing activity was recorded in the Prime North and Suburbs submarkets. Some of the popular brands like Burberry, Tod’s, Rolex, Victoria’s Secret, Barbecue Nation, Pret A Manger, Rimowa and Maison Margiela took up space across quality malls in the city during the quarter.

No new completion in 1Q

  • No new mall completion was recorded in 1Q24. Jio World Plaza became operational last quarter in the Prime North submarket and has maintained an occupancy level of around 68% to date. Many premium brands opened their stores in the mall, and more are expected in the coming quarters.
  • No new mall supply is expected to come on stream in 2024, but we expect three premium malls to be operational in the first half of 2025. Supply of around 2.75 million sq ft is otherwise scheduled to come on stream in the next four to five years.

Overall rents increase moderately

  • Overall rents rose moderately during the quarter, backed by leasing activity observed in Jio World Plaza mall and other quality mall developments that are operating at high occupancies and driven by high footfall, causing landlords to harden their stance during negotiations.
  • Rents and capital values were up across all submarkets, especially in the Prime North and Suburbs submarkets, due to the removal of some average-category malls along with the healthy performance of other prominent malls. Yields declined marginally across all submarkets as capital values increased at a faster rate than rents. 

Outlook: Retail market to remain optimistic

  • The future of the retail market looks more optimistic as we see premium malls continuing to expand their offerings with the introduction of several new brands and categories, both local and global, to enhance their customer experience. Demand from retailers remains healthy, and it is expected that rents will remain growth-oriented for the rest of the year as well.
  • The retail sector is expected to see more traction across all submarkets due to upbeat market sentiment. Around 2.75 million sq ft of supply is expected to become operational between 2024 and 2028, adding more premium stock. The physical retail store experience still remains quite popular and is likely to support market growth even as store formats are constantly refreshed. 

Note: Mumbai Retail refers to Mumbai's overall prime retail market.

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