Mumbai to have nearly 3m sq ft of new prime retail stock over the next four years

Analysts are optimistic about the city’s retail market.

In a recent report, JLL said the future of Mumbai’s retail market looks more optimistic as premium malls continue to expand their offerings with the introduction of several new local and global brands and categories to enhance their customer experience.

“The retail sector is expected to see more traction across all submarkets, due to upbeat market sentiment. Around 2.75 million sq ft of supply is expected to become operational between 2024 and 2028, adding more premium stock,” the report said.

Here’s more from JLL:

Demand in the Mumbai retail market witnessed a significant fall q-o-q since there were no new completions and relevant vacancy was low. Net absorption stood at 20,365 sq ft.

Most of the leasing activity was recorded in the Prime North and Suburbs submarkets. Some of the popular brands, like The Souled Store, Victoria’s Secret, Zouk and Hermes, took up space across quality malls in the city during the quarter.

No new completions in Q2 2024

No new mall completions were recorded in Q2 2024. The most recent completion was Jio World Plaza, which became operational in Q4 2023 in the Prime North submarket and has maintained an occupancy level of around 70% to date.

No new mall supply is expected to come on stream in 2024, but we expect three premium malls to be operational in the first half of 2025. Supply of around 2.75 million sq ft is otherwise scheduled to come on stream in the next four to five years.

Overall rents increase moderately

Rents increased at a moderate pace during the quarter, mainly because of the demand for leasing in quality malls that have high occupancy rates and attract a lot of foot traffic. As a result, landlords became more firm in their negotiation positions.

Rents and capital values rose in all submarkets, particularly in the Suburbs, driven by the closure of average-category malls and the strong performance of other premium malls. Yields decreased slightly as capital values outpaced rent growth.