APPD Market Report Article


February 22, 2024

Dr Samantak Das, Head of Research, India


INR 277


Demand rose significantly with the opening of Jio World Plaza mall

  • In 4Q23, demand in the Mumbai retail market witnessed significant growth q-o-q with the completion of Jio World Plaza mall. Net absorption rose to 315,600 sq ft due to healthy leasing activity in Jio World Plaza mall, as the premium mall witnessed occupancy of around 65%.
  • Most of the leasing activity was recorded in Jio World Plaza in the Prime North submarket, with around 295,700 sq ft of space take-up, while the Suburbs and Prime South submarkets also witnessed healthy store openings. Brands like Cartier, Villeroy & Boch, Gucci, Jimmy Choo, Louis Vuitton, Balenciaga, Uniqlo and Azorte took up space across quality malls in the city during the quarter.

Jio World Plaza goes operational in 4Q23

  • Jio World Plaza became operational in the Prime North submarket, adding 0.45 million sq ft of retail stock. It had a healthy 65% occupancy level upon completion. Many premium brands opened their stores in the mall, and many more are expected in the coming quarters.
  • Two more premium malls in the Suburbs are expected to be operational in the second half of 2024. Supply of around 2.3 million sq ft is otherwise scheduled to come on stream in the next four years.

Rents increase 3.2% q-o-q

  • Overall rents rose moderately during the quarter, backed by leasing activity observed in Jio World Plaza mall and other quality mall developments that are operating at high occupancies and driven by high footfall, causing landlords to harden their stance during negotiations.
  • Rents and capital values were up across all submarkets, especially in the Prime North, due to the completion of Jio World Plaza mall along with the healthy performance of other prominent malls. Yields declined marginally across all submarkets as capital values increased at a faster rate than rents.

Outlook: Retail market to remain buoyant

  • The future of the retail market looks more optimistic as we see premium malls continuing to expand their portfolios with the introduction of several new brands and categories, both local and global, to enhance their customer experience. Demand from retailers remains healthy, and it is expected that rents will remain growth-oriented for the rest of the year as well.
  • The retail sector is expected to see more traction across all submarkets due to upbeat market sentiment. Oberoi Sky City and Aurum Square are likely to be completed in 2H24 in the Suburbs submarket, adding more premium supply. The physical retail store experience still remains quite popular and is likely to support market growth even as store formats are constantly refreshed.

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

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