Kolkata records healthy retail demand in 2025

• In Q4 2025, gross leasing of 0.17 million sq ft was recorded taking the annual total to 0.6 million sq ft. On a y-o-y basis, 48% growth in leasing was witnessed. Both Prime City and Suburbs witnessed similar leasing share of nearly 38% each.
• Fashion & Apparel remained the leading demand driver, accounting for 49% of gross leasing, followed by Food & Beverage at 14%. Leasing activity was predominantly concentrated on high streets, which captured 88% of the total volume, while malls contributed 12%.

Lack of new mall supply in 2025

• In line with the trend witnessed from January to September, no new shopping malls became operational during the quarter. Vacancy levels fell by 30 basis points, reaching a record low of 9.3%.
• The lack of new supply drove retailers to high streets. In 2026, substantial growth in new mall supply is anticipated, with 0.9 million sq ft expected to become operational across three new assets.

Marginal rent increase driven by premium mall developments

• Low vacancy and healthy demand in malls led to a rise in rents. In Kolkata, average mall rent for vanilla stores stands at INR 168.14 per sq ft per month, a 3.5% y-o-y and 0.6% q-o-q increase.
• Prime Others submarket posted the highest annual rent growth at 5.5%, driven by the presence of Kolkata’s most premium malls, including South City Mall and Quest Mall. The Prime City submarket also recorded a 4.3% increase in yearly rents during the period.

Outlook: Retailer interest is expected to rise in 2026 with the introduction of new supply

• In 2026, three Grade A malls with a combined supply of 0.9 million sq ft are expected to be completed in the Suburbs. These upcoming developments have attracted strong interest from retailers.
• Retail leasing is expected to strengthen in the coming quarters. Vacancy levels are likely to increase over the next 12 months with new supply additions, which are also anticipated to drive the rent growth momentum in the mid-term.