Fresh leases dominate Delhi’s retail leasing activity in Q4 2022

Almost 57% of all mall leasing activity was from new leases.

Delhi NCR witnessed total retail leasing of around 0.36 msf during Q4 2022. According to Cushman and Wakefield, this took the annual retail leasing to 1.18 msf for 2022. Quarterly mall leasing was 0.29 msf, adding up to an annual mall leasing volume of 0.9 msf. 

Here’s more from Cushman and Wakefield:

Nearly 57% of quarterly mall leasing activity was contributed by new leases which was approx. 0.16 msf as occupancy increased in recently completed developments. Majority of the quarterly leasing activity in malls were in the Entertainment sector, accounting for 42% share, followed by the F&B segment with a 20% share. 

Main streets witnessed leasing of approx. 0.07 msf in Q4, with large activity concentrated around main streets of Khan Market, South Extension and Defence colony. F&B accounted for 32% of quarterly leasing in main streets, followed by the accessories & lifestyle segment with 26% share. Tim Hortons inaugurated its first store in Skymark, Noida. For the whole year, total main street leasing volume stood at 0.28 msf in 2022. 

Marginal increase in mall space availability as two new malls get added to inventory 

Delhi NCR witnessed 0.49 Msf of new mall supply with addition of two malls in Noida (Gulshan One 29) and Gurugram (AIPL Joy Central) during the quarter, which were the only mall completions in 2022. AIPL Joy central in Golf course Extension, Gurugram witnessed store openings by fashion and apparel, athleisure, beauty and wellness segments along with the inauguration of INOX Multiplex on the second and third floors of the mall. 

On the other hand, Gulshan One 29 in Noida saw the opening of F&B outlets along with stores from entertainment, fashion and apparel segments. As mall inventory increased to 27.86 msf, a marginal rise of 1% point was observed in the fourth quarter, taking overall vacancy to 16.6%. Malls in the superior grade category have much lower vacancies, mostly in single digits. In 2023, an estimated 1.04 msf of new mall supply is awaited 

Mall rentals remained stable; main street witness rental growth 

Mall rentals in Delhi and Gurugram remained stable in Q4, however malls in Noida witnessed an increase of 8 – 12% on a q-o-q basis. Main streets like DLF Galleria in Gurugram witnessed q-o-q rental growth of 5-7%. Rentals in other main streets such as Rajouri garden, South Extension, Khan market etc. though remained stable on a quarterly basis, witnessed a y-o-y increase of 10 – 12% during end 2022.