Why Mumbai’s retail market is expected to remain buoyant

Rents are expected to keep growing for the rest of the year.

The future of the Mumbai retail market looks more optimistic as JLL analysts see retailers focusing on enhancing customers’ in-store experience and landlords transforming malls to active social spaces. 

In a report, JLL said demand from retailers remains healthy and it is expected that rents will remain growth-oriented for the rest of the year as well.

Here’s more from JLL:

Jio World Centre at BKC is likely to complete in 4Q23 in the Prime North submarket with healthy pre-commitments. Brick-and-mortar retail remains a popular format with consumers that still prefer the physical shopping experience, which is also linked to social interactions and recreational activities.

Retail space take-up down q-o-q

In 2Q23, demand in the Mumbai retail market witnessed a significant decline since there were no new mall completions and space was limited in quality malls. Net absorption stood at just around 39,300 sq ft.

Most of the leasing activity was recorded in the Suburbs and limited leases were witnessed in the Prime South and Prime North submarkets. Brands like Apple, The Game Ranch, Pret A Manger, Winterbear, Miniso, Dennis Lingo, Neeman’s and Ritu Kumar took up space across quality malls in the city.

No mall completions in 2Q23

There were no new mall completions in 2Q23.

Jio World Centre at BKC in the Prime North submarket is expected to be operational by the end of the year. Supply of around 3.6 million sq ft is otherwise scheduled to come on-stream in the next four years.

Overall rents up q-o-q

Overall rents increased in 2Q23, backed by healthy leasing activity observed in quality mall developments and driven by high footfall and the throng of shoppers. Landlords have hardened their stance during negotiations.

Rents and capital values were up across all submarkets, driven by the performance of prominent malls. Yields declined marginally across all submarkets as capital values increased at a faster rate than rents.

Note: Mumbai Retail refers to Mumbai's overall prime retail market.