APPD Market Report Article


December 1, 2021


INR 135.5


Mall leasing activity remains subdued

  • Leasing activity in malls remains subdued in 3Q21. Even though malls remained open from the beginning of 3Q21, footfall has yet to ramp up. Many retailers and brands are cautiously waiting for the market to recover over the next few months before they strengthen their presence in mall spaces. Hence the demand for mall spaces remains sluggish.
  • However, Chennai is known for its vibrant high street culture and this trend is expected to continue in the years to come. Many brands who had leased spaces in average malls are now evaluating high streets as an option.

No new supply in 3Q21

  • No new malls became operational in 3Q21.
  • Supply pipeline looks weak until 2022 with most proposed malls yet to break ground and many planned malls being shelved or put on hold.

Rents and capital values remain largely stable

  • While rents remained largely stable, many developers are contemplating retailer demand for purely revenue-sharing rent models.
  • The rents in major high streets dropped by 2-3% q-o-q in 3Q21; high street landlords are offering bigger discounts to attract retailers during this festive season.

Outlook: Demand for mall space set to improve this festive season

  • The upcoming festive season is expected to increase footfall in malls and improve consumer sentiment. This will aid in bringing confidence among retailers to expand their footprints in malls over the next few quarters.
  • Demand for high street space is expected to gain further traction. Rents and capital values for malls are expected to be stable though landlords may remain accommodating for new retailers. Investment sentiment is anticipated to be muted for retail assets in the near term.

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

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