|
India's retail real estate market is set to see gradual improvement in quality space availability, even as supply constraints persist in the near term, according to Cushman & Wakefield's Q2 Retail Market Beat Report. A robust supply pipeline of 12.7 MSF slated for delivery between 2026 and 2028 is expected to support occupier expansion plans over the medium term, with about 1.6 MSF expected in H2 2026. Delhi NCR is projected to account for more than half of the upcoming supply, followed by Bengaluru, Chennai, Kolkata and Hyderabad.
"Looking ahead, the gradual addition of new supply combined with sustained consumption growth is expected to improve market availability of quality retail space and create fresh expansion opportunities for retailers," said Gautam Saraf, Executive Managing Director, Mumbai & New Business, Cushman & Wakefield. The sector maintained growth momentum in Q2 2026, with gross leasing volume reaching 2.4 million square feet across the top eight cities, up 23.2 per cent QoQ and 17.6 per cent YoY, the report said. Total leasing during H1 2026 hit 4.35 MSF, a 3.1 per cent rise over H1 2025, reflecting steady demand despite continued supply constraints. "India's retail real estate market continues to demonstrate the strength of underlying consumer demand," Saraf noted. "Even in an environment where quality retail supply remains constrained, occupiers have shown a clear willingness to compete for well-located assets, whether in premium malls or established high streets." Malls led leasing in Q2 with a 51.3 per cent share at 1.23 MSF, up 33.4 per cent QoQ and 21.9 per cent YoY, despite no new Grade A mall supply for the second consecutive quarter. Main Streets accounted for 48.7 per cent or 1.17 MSF, growing 14.0 per cent QoQ and 13.3 per cent YoY. Sustained demand and no new supply pushed Grade A mall vacancy down to 5.0 per cent, a 163 bps YoY decline, reinforcing landlord-favourable conditions. Delhi NCR, Mumbai and Hyderabad together drove 64 per cent of total Q2 leasing. Delhi NCR led with 0.67 MSF (28 per cent share), followed by Mumbai at 0.50 MSF (21 per cent) and Hyderabad at 0.37 MSF (15 per cent). Ahmedabad posted the sharpest YoY jump at 164.0 per cent, while Delhi NCR rose 123.0 per cent YoY. Domestic retailers dominated with 82.4 per cent of total leasing, concentrated in Main Streets. International retailers took 17.6 per cent, with 76 per cent of their leasing in malls. Fashion led category demand at 28.2 per cent, followed by F&B at 17.2 per cent. Prime high-street rents rose 2.1 per cent QoQ and 5.1 per cent YoY, with Mumbai's Linking Road up 22 per cent YoY and Bengaluru's Indiranagar 100 Feet road up 12 per cent YoY. (ANI)
|
