Mumbai retail rents inch up 0.4% in Q1

Net absorption was at 301,600 sq ft in the same period.

The overall rents in Mumbai's overall prime retail market remained stable in 1Q22, registering 0.4% y-o-y growth in Q1. 

In the current scenario, JLL notes rents have been replaced with a minimum guarantee model, i.e. minimum monthly rent irrespective of revenue generated from sales. Furthermore, a few landlords are considering a sales-linked revenue share model.

Here’s more from JLL:

Rents increased for the Prime North submarket yet remained stable for the Prime South and Suburbs. Similarly, capital values moved upwards for the Prime North and the Prime South submarkets and remained stable for the Suburbs. Yields declined marginally in the Prime North and Prime South submarkets yet remained stable in the Suburbs.

Net absorption decreases slightly in 1Q22

In 1Q22, the Mumbai Retail market witnessed a slight decline in net absorption even though The Capital Mall in the Suburbs became operational with around 55% occupancy level. Total net absorption stood at 301,600 sq ft in 1Q22.

Healthy leasing activity was recorded in the new completion in 1Q22, with brands like Pantaloons, Reliance Trends, Max, Peter England, Lifestyle, Puma, Skechers and many other well-known brands taking up space in the mall.

Overall supply reduces slightly in 1Q22

The Capital Mall began operations in the Suburbs submarket in 1Q22. With about 350,000 sq ft of total leasable area, the mall recorded 55% occupancy levels.

Jio World Centre at BKC in the Prime North submarket is expected to become operational in 3Q22.

Outlook: Retail market remains optimistic

The future of the retail market looks optimistic as COVID-19 cases have subsided significantly. People are now more comfortable and visiting malls, although mall shoppers are still restricted to those who are double vaccinated. Theatres are also open, technically at only 50% occupancy level, yet many malls have started allowing 100% occupancy in the theatres.

Jio World Centre at BKC is likely to complete in 2022 in the Prime North submarket with healthy pre-commitments. Fully operational malls will show more improvement in footfall and retail sales. Retailers remain keen on brick-and-mortar retail even though they are looking to adopt the omni-channel model.