Retailers expand steadily across the city, with high streets as the primary focus

• The city’s malls recorded a net absorption of just 0.01 million sq ft in Q1 2026, as limited prime mall space drove strong leasing activity to high streets, which accounted for 85.5% of total quarterly leasing.
• Leasing activity in the quarter was led by Fashion and Apparel and Footwear, Bags & Accessories, with the suburbs submarket dominating at 56% of activity and Prime City capturing 35%.

No new supply in the quarter

• No new mall supply was added to the city. The city’s retail stock remained at 6.9 million sq ft.
• Prime malls in the city maintained tight vacancy levels. Overall city vacancy decreased by 20 bps q-o-q to stand at 9.5%.

Rents and capital values post marginal increases

• City rental rates increased 0.9% q-o-q, driven by marginal escalations in premium malls and rent increases due to heightened retail activity in key clusters.
• Rents in prominent high streets experienced stronger growth than premium malls, reflecting heightened retailer interest in those locations. Capital values increased marginally by 1.4% q-o-q, maintaining consistent upward momentum.

Outlook: Retailers focus on expanding store count and elevating in-store experience

• Modest new supply additions are expected in 2026, concentrated in Secondary and Suburbs submarkets. Strong demand is anticipated to continue, driven by an influx of local and national retailers and footprint expansion by existing ones.
• The city’s mall segment is set for notable expansion between 2027-2030, with approximately 2-2.5 million sq ft of new developments expected to enter the market. Mall of Madras in the Suburbs submarket is among the prominent malls due for completion in the near-term.