Bengaluru retail rents up 2.2% in Q2

This was driven by rental growth in the Prime City submarket.

Increasing retailer activity for new store openings has pushed Bengaluru retail rents up by 2.2% q-o-q according to JLL data, headlined by growth in prominent malls in the Prime City submarket.

In a report, JLL said the city’s overall capital values are up, and investor interest seems to be picking up for quality projects in the city. A yield compression is also expected going forward.

Here’s more from JLL:

The demand for retail space in shopping malls and high streets has remained consistent. During the quarter, retailers remained in expansion mode, which was most visible in prominent shopping malls and high streets across the city. 

Retailers have continued to lease space in prominent malls in the city like Orion Mall (Brigade Gateway), Mantri Jupiter, and Forum Falcon City Mall. New store openings included Decathlon at Orion Mall (Brigade Gateway), Style Union at Mantri Jupiter in the Secondary submarket, along with Chaayos, Haagen Dazs, Girias and CaratLane at Forum Falcon City Mall in the Suburbs submarket.

No new mall completions in 2Q23

The quarter saw no new mall completions. Soul Space Arena Mall on the Outer Ring Road was shut down and repurposed. The city’s total retail stock now stands at 14.03 million sq ft.

There is a healthy supply pipeline in the near- to medium-term with Phoenix Mall of Asia to be operational by end-2023 and VR Arena Mall, among others, lined up for 2024 and 2025. All the upcoming supply is now lined up for the Suburbs.

Outlook: Retail leasing activity is expected to stay strong in the future

Due to a strong demand upswing fueled by pent-up demand, robust activity is expected in quality malls scheduled for completion over the next 12 months. Malls such as VR Arena Mall and Phoenix Mall of Asia have already received more than 75%–80% pre-commitment levels and will contribute to the healthy net absorption projections.

Fashion & clothing, home & decor, electronics, jewellery, and food & beverage retailers are expected to continue extending their physical store network, with an emphasis on setting up flagship locations in high-consumption corridors.

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