APPD Market Report Article


December 1, 2021


INR 187.1


Overall demand in malls remains subdued in 3Q21

  • With the economy opening up and the upswing in vaccination rates, there are signs of some positive momentum in the retail market. Retail space transactions have seen a marginal increase in both organised retail formats as well as on high streets. However, mall activity remains sluggish.
  • Footwear, home décor, fashion and apparel, food and beverages and automobile retail segments have been driving demand for retail spaces since the reopening of the retail sector. The steady increase in footfall in both shopping malls and high streets in the city is likely to further push retailers to look for space.

No mall completions in the quarter

  • No new mall supply was recorded during 3Q21. Lulu Global Mall in the Prime submarket and Bhartiya City Mall at Thanisandra in the Suburbs submarket are expected to become operational over the next two quarters.
  • SBR Lucky Mall was launched in Electronic City Phase 2 in the quarter. The mall has an area of ​​0.28 million sq ft and will be completed by 2023.

Rents and capital values across submarkets remain stable

  • Rents remained largely stable in the quarter, though landlords were open to negotiating new deals. Retailers are seeking rent discounts and are also interested in moving to a pure revenue-sharing model.
  • Capital values remain stable, and in the short term, the impact on investments will remain.

Outlook: New completions to drive up absorption levels significantly

  • With 1.53 million sq ft of mall completions lined up over 2H21 — which have cumulatively recorded pre-commitments of around 50% — absorption levels will show a big improvement by end-2021.
  • We expect a gradual recovery to play out over the next few quarters as the festive season, rising vaccination rates and safety measures help support an increase in mall footfall and retailer activity.

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

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