At 9.5 lakh sq ft, Chennai leads in retail space absorption: JLL India

New completions saw a decline of about 25% YoY with total completion of new mall space recorded at approximately 2.1 msf in H1 2018 over 2.8 msf in H1 2017.

The retail market, which has been experiencing a new lease of life with investment interest returning to the market, has also see a growth in leasing activities from both international and domestic brands.

The total net absorption for H1 2018 was recorded at close to 2 msf in top seven cities of India, of which Chennai saw the highest absorption at 950,000 square feet (sf). Chennai saw the completion of a major retail project which attracted many brands to set up and start operations. Delhi (325,000) and Hyderabad (358,000) also saw healthy leasing activities, though, Delhi saw a slowdown owing to reduced new completion in the period under study. Mumbai saw new leasing of 118,000 sf in H1 2018.

The new supply for retail mall space was estimated to be 2.1 msf in H1 2018 which was lower by approximately 25% over the same time last year. However, with robust leasing activities, the reduced supply will help the rentals remain stable and even firm up over a period of time. Development firms have been aiming at creating products that match the requirements of retail companies to ensure sustained sales velocity. Chennai saw the highest volume of retail mall supply in H1 2018 which was close to 1 msf. While Hyderabad recorded new supply of 500,000 sf in the same period. Both these cities had not witnessed any new supply in the comparable period last year.

JLL’s estimation for July to Dec to see fresh supplies of 3.7 msf in these cities. Hyderabad will see the highest volume of 1.8 msf followed by Delhi at 715,000 sf, Chennai (511,000 sf) and Bengaluru (500,000 sf).