Retail leasing reached 1.6 million square feet in the third quarter of 2024, with Hyderabad, Delhi NCR, and Mumbai leading in volume, according to Cushman & Wakefield’s Q3-2024 Retail MarketBeat Report. High streets outperformed malls, representing 68% of the total retail space leased, and high street rental rates grew by an average of 15% year-over-year (YoY).
As published by the Hindustan Times, demand for high-street locations has surged, particularly in Delhi NCR, Bengaluru, Chennai, and Kolkata, where rentals increased up to 15% YoY. Delhi NCR saw a 13-15% rental growth, while Bengaluru and Mumbai experienced rises of 12-14% and 5-6%, respectively.
Delhi NCR recorded 0.3 million square feet in retail leasing this quarter, with Gurugram leading at 44% of total leases, followed by Delhi at 42%, and Noida at 14%. Despite this, high-demand malls maintained a tight vacancy rate of about 3%. The Galleria Market in Gurugram saw a 20% spike in rental rates, while Delhi’s Khan Market recorded a 7% increase.
Mall leasing activity lagged behind high streets, constituting just 32% of the total leasing volume, with no new mall space added in Q3 2024. Vacancy rates in Grade-A malls fell as demand outpaced supply, driven partly by a high influx of international brands, which represented about 30% of mall leasing volume year-to-date in 2024.
Overall, the sector recorded a leasing volume of 5.5 million square feet for the year so far, with foreign brands contributing 15%. The report anticipates a rise in retail space supply in the fourth quarter, with about 1.8 million square feet of Grade-A malls set to open in cities such as Mumbai, Delhi NCR, and Pune.
“The Indian retail sector is evolving rapidly, with high street leasing thriving amid limited mall supply,” said Saurabh Shatdal, head of retail and managing director of capital markets at Cushman & Wakefield. “Retail trends indicate a shift toward discretionary spending, which is reflected in the leasing activity led by fashion, food and beverage, and accessories.”
In Mumbai, malls recorded a robust 0.16 million square feet in leasing during Q3, a 76% increase YoY. Suburban malls contributed 64% of the city’s total leasing activity. Looking ahead, Mumbai’s retail landscape could expand significantly, with nearly 1.7 million square feet of Grade-A mall space set to enter the market in the next year. Main streets such as Linking Road, Colaba Causeway, Borivali’s LT Road, and Kemps Corner saw a rental rise of 5-7% YoY.
Bengaluru’s retail sector recorded 0.2 million square feet in leasing in Q3, showing nearly a 10% increase YoY. Malls accounted for 44% of this activity, while high streets contributed 56%, or 0.11 million square feet. Mall vacancy rates in Bengaluru also declined, from 12.6% in the prior quarter to 11.2%, underscoring strong demand.
As India’s retail leasing market adapts to changing consumer behavior and limited mall space, high streets continue to attract significant interest. With new mall supply expected soon, the sector is poised for further growth in the coming months.