Healthy retail leasing activity in Q2 2026

• Gross leasing volume rose by 37% q-o-q to 0.89 mn sq ft, with Suburbs (57%) and Prime Others (32%) driving demand for retail spaces. Net absorption remained robust at 0.49 mn sq ft, supported by new retail store openings in recently operational malls.
• Malls dominated leasing activity, accounting for over 79% of total leasing volume. Food & Beverage emerged as the leading retailer category with a 32% share, followed by Entertainment (19%) and Fashion & Apparel (17%).

With new completions, total retail stock scales up to 29.0 mn sq ft

• In Q2 2026, two new malls came on the block – City Centre II (0.20 mn sq ft) in Prime Others and ATS Khyber Range (0.25 mn sq ft) in the Suburbs (Ghaziabad). An additional 0.73 mn sq ft of retail space is expected to be delivered in Suburbs next quarter.
• Driven by healthy retailer demand in newly operational malls in the recent past, vacancy levels declined by 35 bps q-o-q to 12.4% at the end of Q2 2026.

Moderate increase in capital values and rents annually

• In Q2 2026, rental values recorded marginal growth of 0.3% q-o-q and 3.9% y-o-y, while capital values increased by 1.2% q-o-q and 5.7% y-o-y.
• At the submarket level, Prime South led rental growth with a 0.8% q-o-q increase, driven by demand for premium retail spaces amid the absence of new supply, while Suburbs and Prime Others recorded 10 to 50 bps rental growth over the previous quarter.

Outlook: Leasing activity is likely to remain healthy in 2026, underpinned by a strong pipeline of quality supply

• Expansion plans by major retail chains and numerous new store openings in upcoming malls are likely to support leasing volume in the second half of the year.
• Rents are projected to increase by 1-2% by end-2026, driven by healthy absorption and tight vacancy levels. Capital values are expected to see a good increase and yield compression of 10 to 15 bps is expected by the end of the year.