Gross leasing momentum moderates q-o-q

• Gross leasing volume reached 0.29 mn sq ft in Q1 2026, driven primarily by activity in Prime Suburbs. Fresh leasing at the newly operational Lakeshore Gateway mall underpinned a healthy net absorption of 0.10 mn sq ft.
• Malls outperformed high streets in terms of their share of quarterly leasing activity, which stood at 54%. In terms of retailer categories, demand was primarily driven by Entertainment (54%), followed by Fashion & Apparel (20%).

No new supply added in Q1 2026

• Mall stock remained unchanged and, with new retailers taking up store space, vacancy levels declined by 90 bps to 20.2%. This was primarily driven by leasing activity from retailers at the recently opened Lakeshore Gateway Mall in Prime Suburbs.
• The near-term supply outlook remains positive, supported by a healthy development pipeline in the Prime Suburbs, where improving leasing traction continues to encourage new project launches.

Capital values and rents up q-o-q

• In Q1 2026, overall rents rose by 1.5% q-o-q and 11.1% y-o-y. The strong annual growth was supported by the completion of Grade A malls in the Prime Suburbs, which continued to command healthy rental premiums.
• Overall capital values continued to trend upward in Q1 2026, rising 2.0% q-o-q and 14.2% y-o-y . Growth was driven by Prime Suburbs, while Prime Central locations recorded more modest growth.

Outlook: Leasing momentum is expected to remain healthy in 2026, supported by a strong supply pipeline

• A healthy supply pipeline is expected to keep leasing activity strong, while expansion plans by major retail chains and the launch of new store formats in upcoming malls are likely to further support leasing in the coming months.
• In the Hyderabad retail market, yields are expected to harden gradually in the near term, supported by sustained demand for premium, well-located retail assets.