New Delhi retail net absorption slumps 72% in 4Q21
Blame it on lack of new supply and low vacancy in quality malls.
Delhi NCR’s retail property market saw net absorption decrease by 72% q-o-q in 4Q21 as new supply remains tight and quality malls retain low vacancy rates.
JLL says, “With seasonal festivities and the ease in COVID-19 restrictions, supported by increased vaccination rates, shoppers came back and malls witnessed more footfall.”
Here’s more from JLL:
The newly launched Pacific Mall in Netaji Subhash Place witnessed some good transactions with brands like Da Milano, Gant, Rare Rabbit and others opening up new stores. In Gurgaon, brands like New Balance, Hamster London and Shantanu & Nikhil opened stores in the Ambience Mall. In Noida, DLF Mall of India saw transaction activity with brands like House of Fett, Chique and Guess coming in.
No new retail completions recorded in 4Q21.
In 2022, around 1.06 million sq ft of new supply is anticipated, primarily in the suburbs. The majority of the upcoming retail projects are part of mixed-use developments or retail blocks with commercial towers.
Transit Oriented Malls are also gaining traction, as these developments will continue to grow with the improving infrastructure and connectivity.
Rents remain stable in the quarter
Prime malls with high demand saw stable rents underpinned by increased footfall and sales recovery. There may be restructuring of store networks by big retail chains emphasising increased revenue and bringing in optimal store sizes.
Increasing vaccinations, the roll-out of booster doses and the containment of the fresh onset of COVID-19 cases will help market recovery, which slowed down by the end of the year. Rents are expected to remain stable if market conditions improve in the coming months.
Outlook: Slow space take-up expected in 1Q22
Leasing activity is expected to slow down in 1Q22 with increased COVID-19-related restrictions, such as stores opening on an odd-even basis and weekend curfews in Delhi and Gurgaon. The tightening of these measures will cause disruption in business and see retailers adopt a very cautious approach.
Leasing activity and demand is expected to pick up subsequently in the later quarters of 2022 with new mall completions and with the roll-out of booster doses aiding market confidence and sentiment recovery.
Note: Delhi Retail refers to Delhi NCR's prime retail market.