What’s driving Delhi’s strong retail leasing momentum? | Real Estate Asia
, India

What’s driving Delhi’s strong retail leasing momentum?

Delhi retail leasing volumes rose 34% to 0.45 msf in Q3.

According to a recent report from Cushman and Wakefield, during the third quarter of 2023, Delhi NCR witnessed retail leasing volumes of 0.45 msf across malls and main street, which is 34% higher than the previous quarter and a significant rise of 1.3X when compared to the same period last year. This brings the total YTD leasing to 1.14 msf which is 39% higher when compared to the collective nine months of 2022. 

Here’s more from Cushman and Wakefield:

During the quarter, approximately 0.3 msf of mall space was leased. This represents a 35% increase on a q-o-q basis and a significant 1.7X increase on a y-o-y basis. 16% of these leases constituted new space take-ups. The F&B sector played a significant role in driving mall leasing demand, capturing 28% of the market share, closely followed by the Accessories & Lifestyle and Fashion sector, which accounted for 27% and 22% of the leasing activity, respectively. 

Leasing activity on the main streets of Delhi NCR also increased during the quarter, with a total of 0.14 msf of space leased. This marked a 33% increase on a q-o-q basis and a substantial 77% growth compared to the same period in the previous year. Submarkets in South Delhi, particularly South Extension-I and Lajpat Nagar, drove the demand. 

Within the main street leasing landscape, the Accessories & Lifestyle segment took the lead, capturing a 34% share of the market, followed by the F&B sector with 23% and the CDIT segment with 13% of the shares. 

Mall vacancy rates decline marginally during Q3 2023 

Delhi NCR experienced a q-o-q decline of 10 bps in mall vacancy levels, however, an increase of 20 basis points when compared to the same period last year. As a result, the overall mall vacancy rate in Delhi NCR now stands at 15.7%. Superior quality malls witnessed a marginal drop, and it currently sits in a narrow range of 3 – 5%. The city is likely to witness an estimated supply of 0.82 msf in the next six months, which could lead to a slight uptick in vacancy levels in the superior and good category segments. 

Rental market remains stable during the quarter 

Mall rentals in Delhi NCR remained stable during the quarter. Prime main streets such as South Extension, Lajpat Nagar and Galleria market witnessed a 10-15% growth on a y-o-y basis. Other main street markets such as Khan Market, Rajouri Garden, Greater Kailash and Noida Sector 18 remained stable on a q-o-q basis as well as y-o-y basis.


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