Highest gross leasing volume since 2018

• In Q1 2026, gross leasing of 0.32 mn sq ft was recorded in the retail sector. On a y-o-y basis, leasing grew 362%, while q-o-q growth reached 85%. The Suburbs drove 86% of demand, with Prime City and Prime Others contributed 8% and 6% of leasing respectively.
• Entertainment and Fashion & Apparel led retail space take-up, accounting for 31% and 30% of gross leasing respectively, followed by consumer durables and food & beverage brands. Malls drove leasing activity, capturing 57% of total volume.

New supply influx in the quarter

• Kolkata recorded its first new mall opening in five years in Suburbs during the opening quarter of 2026. With this new supply influx of 0.25 mn sq ft in Serampore, the city’s total mall stock inched up to 6.5 mn sq ft.
• Addition to new mall stock pushed the mall vacancy up to 15.1%. The Prime Others submarket maintained the lowest vacancy at 9.4%, followed by the Prime City submarket.

Moderate increase in mall rentals

• Rising demand for quality retail spaces in shopping malls was instrumental in driving rental growth upwards. Average mall rent for vanilla stores in Kolkata reached INR 170.8 per sq ft per month, up 5% y-o-y and 2% q-o-q.
• Prime Others submarket recorded the strongest annual rent growth at 10%, propelled by Kolkata’s most premium malls including South City Mall and Quest Mall. The Prime City submarket also saw a 4% annual rent increase during the period.

Outlook: Retailer interest is expected to remain stable in the coming quarters

• One additional mall with 0.3 mn sq ft of space is expected to be completed in Joka (Suburbs) in 2026. This upcoming development is likely to attract strong retailer interest as it will be a significant addition in organized retail in the catchment area.
• Retail leasing is expected to remain steady in the coming quarters. Vacancy levels are likely to decline over the next 12 months amid rising demand. Sustain rental growth is expected to continue in the mid-term.