Mumbai, March 19 The Indian retail sector is witnessing strong growth, with demand for mall space surpassing supply for the third consecutive year, a new report said on Wednesday.
The leasing momentum remains high as retailers continue to expand their presence in organised retail spaces across major cities.
A report by Anarock Retail showed that in 2024, more than 6.5 million square feet of organised retail space were leased, significantly exceeding the supply of new stock.
This has led to a sharp decline in vacancy rates, which now stand at just 7.8 per cent in shopping malls. As a result, rental values have surged, reflecting the increasing competition among retailers for prime retail locations.
Retailers are also shifting towards larger store spaces to enhance customer experience. Spaces ranging between 2,000 and 5,000 square feet have recorded the highest number of leasing transactions.
However, stores between 1,000 and 2,500 square feet are also in high demand due to the limited availability of spaces in malls.
Among retail categories, the beauty & personal care and departmental store segments saw an 11 per cent rise in leasing activity in the second half of 2024.
Apparel and accessories continue to dominate, accounting for 40 per cent of total leasing transactions during this period.
The decline in vacancy rates is most evident in premium malls, where occupancy has reached nearly full capacity, the report said.
Vacancy levels have fallen from 15.5 per cent in 2021 to just 7.8 per cent in 2024, showcasing the strong appetite for retail space.
Looking ahead, the report indicated that around 37.7 million square feet of new mall space is expected to be added between 2024 and 2028.
The highest supply is expected in the National Capital Region (NCR), which alone accounts for nearly 47 per cent of upcoming mall developments.
Other major cities such as Mumbai Metropolitan Region (MMR), Hyderabad and Bengaluru will also see significant additions to organised retail space.
"Rental values across malls and highstreets are on the rise and are expected to continue their upward climb until new good quality supply is added," said Anuj Kejriwal, CEO and MD, Anarock Retail.
--IANS
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