Mumbai to see nearly 1.2m sq ft of prime mall supply by year-end

The malls will be operational across two suburban micro-markets.

In the first quarter of 2024, leasing activity in Mumbai’s grade-A malls stood at 86,950 square feet, primarily comprising term renewals of stores smaller than 10,000 square feet, according to data from Cushman and Wakefield. 

This represents a significant decrease compared to a robust previous quarter that also saw inauguration of a luxury retail mall. 

Here’s more from Cushman and Wakefield:

On a y-o-y basis, leasing activity declined by ~45%, as Q1-23 too was a healthy quarter. The fashion segment dominated the quarterly leasing activity, capturing 71% of the total, while accessories & lifestyle and CDIT segments contributed less than 10% each. 

During the quarter, there were no new additions to supply, and no take-up of fresh space in existing properties, thereby maintaining the city's overall vacancy rate at 8.3%. On the other hand, superior malls boast a very tight vacancy rate of 1.1%. 

By the end of 2024, close to 1.2 million square feet of Grade A mall supply will become operational across two suburban micro-markets. It is expected that the city-level vacancy will largely remain range-bound in the upcoming quarters given the pre-commitment activity in the upcoming supplies. 

Fashion segments drove main street leasing 

During the quarter, prominent main streets of Mumbai experienced sustained leasing activity, totalling around 74,000 square feet. The fashion segment drove this activity, with notable store openings in areas such as Khar and Santacruz. Additionally, high-end hypermarkets and F&B brands were actively leasing in these submarkets. 

Malls and main street rentals witness uptick in Q1 

City-wide mall rentals witness an uptick of 2-5% on a q-o-q basis on the back of limited space availability and active term renewals. Prominent main streets in prime locations also witnessed a rental appreciation of 2-3% from last quarter and 7-12% in annual terms. Mall rentals are expected to broadly remain range-bound going forward, largely owing to high levels of early pre-commitments expected in the upcoming malls.