Retail space demand remains stable in the city

• In Q4 2025, a net absorption of 0.02 million sq ft was recorded in the city’s malls. Strong leasing occurred in prime high streets, accounting for 63% of total leasing due to limited space availability in prime malls.
• Leasing activity in the quarter was led by fashion and apparel, beauty, cosmetics & wellness with most retailer activity concentrated in the Prime City and Suburbs submarket, both together accounting for 86% of total area leased.

No new supply in the quarter

• No new mall stock was added to the city supply. The city’s retail stock stands at 6.9 mn sq ft.
• Prime malls in the city maintain tight vacancy levels. Overall city vacancy decreased by 36 bps q-o-q and now stands at 9.7%.

Rents and capital values increased marginally

• City rental rates increased 2.1% q-o-q, driven by marginal rent escalations in premium malls and rent increases due to heightened retail activity in key retail clusters.
• Despite steady demand for premium-quality malls, rents in prominent high streets appeared to appreciate more, driven by increased traction in these retail hubs. Capital values rose marginally, by 2.6% q-o-q, following a steady growth trend.

Outlook: Leasing is projected to stay strong

• Strong demand for retail space is anticipated to continue, with an influx of local and national retailers and footprint expansion by existing ones.
• Over the next five years (2026 to 2030), 6.0-6.5 million sq ft of mall space is expected to be added to the market. Mall of Madras in the Suburbs submarket is among the prominent malls due for completion in the near-term.