Delhi total retail leasing volume jumps 30% to 1.5msf in 2023

Quarterly leasing activity in main streets hit record highs in Q4. 

In a recent report, Cushman and Wakefield revealed that close to 0.4 msf of leasing volumes were recorded in the Delhi NCR retail market across malls and main streets in Q4-23. 

While this marks a decline of ~11% q-o-q, the volume was higher on an annualised basis. This brings the annual total leasing to 1.5 msf in 2023, which is 30% higher than that observed last year. 

Here’s more from Cushman and Wakefield:

Approximately 0.23 msf of mall space was leased in Q4, broadly in-line with the average volume seen over the past eight quarters. New space takeups constituted 13% share of the quarterly mall leasing. During Q4, the F & B sector continued to lead mall leasing demand with a 30% share in leasing, followed closely by fashion with a 26% share and entertainment with 11% share. With that, the annual mall leasing of 2023 stood at 1.03 msf, 15% higher than 2022. 

Delhi NCR witnessed highest-ever quarterly leasing activity in main streets, with nearly 0.17msf of space leased in Q4, which is 18% higher than the previous quarter. With that, annual main street leasing stood at 0.51msf. 

Prime submarkets in Gurgaon, such as Cyber City, Golf Course Extension Road, and New Gurgaon region led the quarterly demand, followed by North Delhi (Pitampura and Rohini submarkets) and South Delhi (Lajpat Nagar, Basant Lok, and South Extension) markets. The F&B sector dominated with a 39% share, followed by the fashion segment and Health & wellness category with 9% share each. 

2023 saw lowest additions to new mall supply; vacancy drops 

Mall vacancy rate in Delhi NCR stood at 15.6% during Q4 2023, down by 90 basis points when compared to the same period a year ago. Limited new completions during 2023, a year that saw lowest supply in 5 years, was primarily the reason. Close to 1.0 msf of new mall supply is anticipated in 2024 that could result in slight uptick in vacancy. 

Mall rents remain stable; select main streets continue to witness rental growth 

Mall rentals in Delhi NCR remained stable during the quarter. Prime main streets such as Khan Market and Galleria market witnessed a 3-5% growth on y-o-y basis, whereas South Delhi markets such as South Extension and Lajpat Nagar witnessed a 10-15% growth on y-o-y basis. Other main street markets such as Rajouri Garden, Greater Kailash and Noida Sector 18 remained stable on q-o-q basis as well as y-o-y basis.