Retail demand declines q-o-q

• In 4Q22, demand in the Mumbai retail market witnessed a slight decline in the absence of any mall completions. Total absorption stood at just about 12,200 sq ft in the quarter.
• Most of the leasing activity was recorded in the Prime South and Suburbs submarkets. Brands like Social, Fitness First, The Irish House, Azorte, Rare Rabbit, American Eagle and Daiso took up space in Kohinoor Mall, Phoenix High Street Mall and Seawoods Grand Central Mall.

No new mall completions

• There were no new mall completions in 4Q22.
• Jio World Centre at BKC in the Prime North submarket is expected to become operational by 3Q23. Supply of around 4.4 million sq ft is otherwise scheduled to come online in the next four years.

Rents increase slightly q-o-q

• Overall rents increased slightly in 4Q22, backed by improving leasing activity in malls and increased footfall, which allowed developers and landlords to harden their stance during negotiations.
• Rents and capital values increased in all submarkets after restrictions were lifted during 2022. Yields declined marginally across all submarkets as capital values increased at a faster rate than rents.

Outlook: Retail market’s future performance is optimistic

• The future of the retail market looks more optimistic now that footfall, retailer business and revenues are back to pre-COVID-19 levels. People are more secure in public places, and this is reflected in the increased mall footfall. Theatres and multiplexes are functioning at 100% capacity and have become a major booster to mall performance in the quarter.
• The retail sector is expected to see more traction across all submarkets with business normalcy restored. Jio World Centre at BKC is likely to complete in 3Q23 in the Prime North submarket with healthy pre-commitments. Retailers remain keen on brick-and-mortar stores even as they seek to adopt an omnichannel concept.