Net absorption shows healthy improvement

• Net absorption jumped significantly by 201% q-o-q, backed by a new completion in the quarter. The Suburbs submarket led in terms of demand. A good number of transactions were recorded in Mall of India and in the recently opened Gulshan One29 — both in Noida. In Gurgaon, Reach Airia and Ambience Mall saw good leasing momentum.
• In Prime South, many transactions were recorded in Select Citywalk, DLF Promenade and Ambience Mall, with international brands like Balenciaga as well as homegrown brands like Aachho opening their flagship stores in the country. Prime Others submarket also saw good leasing activity, mostly for Pacific Mall, Subhash Nagar and Vegas Mall.

One new mall completion in 4Q22

• Gulshan One29, which is part of a mixed-use development at Sector 129, Noida, in the Suburbs submarket, went operational with a leasable area of around 0.25 million sq ft. It recorded healthy pre-commitments as it is in a high-density residential and commercial corridor.
• Close to 3 million sq ft of retail developments are set to complete in 2023, with the majority of it in the Suburbs. Many upcoming retail projects are part of mixed-use developments.

Rents and capital values remain stable

• Rents and capital values remained stable across all the submarkets.
• Going forward, rents are expected to increase with new brands coming in and existing brands expanding their footprint.

Outlook: Demand expected to stay strong, backed by strong supply

• Close to 3 million sq ft of retail developments are expected to complete in the next 12 months. The Suburbs submarket will see a majority of the new malls. Various international brands have announced their plans to enter the Indian retail market. Many local Indian offline retailers are expected to open physical stores as part of their expansion drive.
• Rents in quality malls are expected to increase marginally in the coming months, with leasing activity picking up. Infrastructure developments and improved connectivity will likely act as major demand boosters for the retail developments in the suburban submarkets. Leasing activity is expected to stay strong in the forecast period, backed by quality upcoming supply.