Delhi’s mall vacancy rate declines to 15.8% in Q2

Prime malls have tight vacancy rates ranging from 4 to 6%.

Delhi NCR experienced a q-o-q decline of 30 bps in mall vacancy levels and 80 basis points decline compared to the same period last year, according to a Cushman and Wakefield report. As a result, the overall mall vacancy rate in Delhi NCR now stands at 15.8%. 

Superior quality malls continue to experience tight vacancies in the range of 4-6%, the report said, while most of the decline in vacancy rates was observed in the next grade – the good category malls. The city is likely to witness an estimated supply of 0.82 msf in the second half of this year, which could lead to a slight increase in vacancy levels in the superior and good category segments. 

Here’s more from Cushman and Wakefield: 

In Q2 2023, retail leasing volumes in Delhi NCR reached 0.33 msf, a marginal 6% decline compared to the previous quarter and remaining relatively consistent on a y-o-y basis. Consequently, total leasing for H1 2023 amounted to 0.7 msf, i.e., 11% increase compared to H2 2022.Near-about 0.23 msf of mall space was leased during the quarter, reflecting a marginal 4% y-o-y decline. New leases accounted for 36% of the overall mall leasing activity for the quarter. Amongst various segments, fashion sector stood highest, contributing 38% to mall leasing, followed by department stores with a 16% share and F&B segment with 11% share. 

In Q2 2023, main streets in Delhi NCR experienced a surge in leasing activity, reaching 0.10 msf. This figure represents a notable 24% increase compared to the previous quarter and 13% y-o-y rise. Micro markets like Rajouri Garden, Connaught Place, Greater Kailash, and Model Townwitnessed highest levels of activity during Q2. Fashion sector again contributed the largest share accounting for 41% of quarterly leasing activity.F&B segment followed closely with a 21% share, while Accessories & Lifestyle segment secured a 12% share.

Mall rentals hold steady while rentals appreciate in select main streets 

Mall rentals in Delhi NCR remained stable during the quarter. Prime main streets such as South Extension, Lajpat Nagar and Vikas Margwitnessed a 7-10% growth and DLF galleria in Gurugram witnessed a 5% on a qoq basis. Other main street markets such as Khan Market, RajouriGarden, Greater Kailash and Noida Sector 18 remained stable on a qoq basis, however, witnessed a 7-12% increase in rents when compared to the same period last year. Markets such as Connaught Place, Karol Bagh and Cyber hub (Gurugram) recorded stable rentals.