Fresh leases dominate Mumbai’s Q1 retail leasing activity

The demand for fresh leases primarily came from fashion and F&B.

The first quarter of the year witnessed strong leasing momentum with close to 158,700 sf across malls, according to a report by Cushman and Wakefield. Fresh space take-ups accounted for 52% of the quarterly activity, driven by Fashion (42% of the fresh leases) and F&B (28% of the fresh leases) category stores.

Here’s more from Cushman and Wakefield:

Term renewals in prominent city malls were driven by existing mid and large retail stores. About 50% of the total leasing activity was concentrated in eastern suburban locations like Kurla, Ghatkopar and Thane, with limited availability in south/south-central Mumbai and Western Suburbs.

A key announcement in this quarter was India’s first company-owned company-operated store by Apple in Jio World Drive Mall in BKC which is set to be operational in April 2023. On the back of continued strong leasing momentum, city-level mall vacancy declined to 8.73% from 9.21% as of the previous quarter.

No new retail mall supply was recorded during this quarter. Consequently, superior category malls continue to enjoy tight vacancy levels (less than a percent). However, close to 1.59 msf of Grade A supply is expected to be operational by end of this year and this will help bring in much-needed supply into an otherwise tight market. This supply addition should result in a marginal increase in vacancy in the near term.

F&B and Fashion drove quarterly main street leasing

Prominent main streets in Mumbai witnessed good leasing activity during the quarter with close to 104,000 sf of store openings recorded. This quarter witnessed F&B and Fashion category store openings in core city locations like Fort, Kala Ghoda and Lower Parel locations. Peripheral locations like CBD Belapur, Kharghar and others witnessed F&B, Fashion and CDIT store openings.

Mall and main street rentals remained stable during the quarter

City-wide mall rentals witnessed an average 2-5% rise on a q-o-q basis on the back of strong leasing activity. Prominent main streets have also witnessed rental appreciation during this quarter on the back of robust retail space demand, which is expected to continue. Despite tight vacancies, the upcoming supply of 1.59 msf of Grade A supply is likely to keep rentals range-bound.

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