Market Outlook

Mall vacancies which spiked during the second half of 2018 have declined to 5% levels again. Tenants were quick to grab quality space options available in operational malls. Fashion & Apparel, F&B were dominant with more than half of the leasing share during the quarter. Brands such as Fila, Kompanero, Da Milano, Rare Rabbit, Tarun Tahiliani etc. have opened stores recently. Sephora, the international multi-brand personal care & beauty retailer has recently launched two stores in prime retail malls.

With leasing activity totaling close to 360,000 sf, Q1 2019 recorded the highest first quarter leasing for the city in the last 7 years. Salt Lake submarket constituted an overwhelming majority (97%) of the leasing recording two large transactions above 100,000 sf during the quarter.

With strong leasing activity headlined by select sub-markets, net absorption for Q1 stood at 1.4 msf; nearly three times higher compared to Q1 2018. Nearly 50% of the net absorption was seen on account of new project completions during the quarter.

The overall vacancy reduced considerably to 11.7% from 13.4% on the back of stock withdrawal of four non performing / poor grade malls totaling to 975,000 sq ft. during the quarter. This highlights the high occupancy and good performance of quality mall developments across the city.