Mall Vacancy Levels Down to 8.3% in First Half of 2024

Mumbai, December 9, 2024: The retail sector’s unprecedented growth amid favourable economic factors and rising affluence has translated into impressive mall space leasing in H1 2024, finds the ANAROCK Retail RELEAP report for this period. Mall vacancies are now at just 8.3 per cent, down from 15.5 per cent in 2021 as demand continually outstrips supply.

Says Anuj Kejriwal, CEO & MD – Retail, Industrial & Logistics – ANAROCK Group, “Vacancy in prominent malls continues to be on the decline owing to limited supply and robust leasing. Superior malls across the country are operating almost full capacity. Major national and global brands are keen to take up quality spaces in successful malls and high streets across cities.”

The Apparel & Accessories and Food & Beverages categories remain the dominant segments – however, exclusive stores for watches & jewellery have also witnessed remarkable growth during the year – accounting for nearly six per cent of the total retail leasing volume.

“Retailers and brands continue to prefer smaller spaces as nearly 70 per cent  of the leases were for spaces admeasuring up to 2,500 sq ft,” says Kejriwal. “That said, as fresh supply gets added in the coming years, larger spaces will garner an increasing share of total leased area. The highest share of upcoming supply is planned in NCR, MMR, and Hyderabad in the next 4/5 years. Together they account for over 85 per cent of the total incoming supply.”

In the meantime, rental values across prominent high streets are on the rise – and are expected to continue the ascend till quality new supply is added.

The first half of the current year mirrored the leasing momentum seen in the past two years, with over 3 million sft leased across the country’s major cities. The next few years will witness major supply addition across all these cities, with the NCR accounting for the majority.