Bengaluru suburban market dominates retail supply pipeline

Two new malls with around 0.58m sq ft are expected to open by year end.

In 1Q24, along with fresh leasing in the newly operational malls in Bengaluru like Phoenix Mall of Asia, churns also continued in established city malls like One Sobha Mall, Lulu Mall and Orion Avenue Mall. 

According to JLL, prominent retailers taking up space during 1Q were Samsung, Toni & Guy, Decathlon and Reliance Digital, among others.

Here’s more from JLL:

New leases and store openings were recorded across the prominent retail hubs of Jayanagar, Indiranagar, Airport Road and Uttarahalli by retailers including Nike, Landmark Group (Lifestyle/Home Centre/Max/Fun City), US Polo, Wooden Street and Style Up.

No new malls go operational during the quarter

One of the underperforming malls in the Secondary submarket was withdrawn from the stock in the quarter. The current mall inventory at the end of 1Q24 stood at 14.8 million sq ft.

Malls slated for completion in 2024 include SBR Keerthi at Old Madras Road and Brigade Cornerstone Utopia Mall at Varthur Road, both located in the Suburbs submarket.

Both rents and capital values record q-o-q growth

The quarter saw a 1.8% q-o-q increase in rents, largely driven by higher rents in superior-quality malls witnessing low vacancy levels amid sustained demand for space from retailers. 

Capital values in Bengaluru increased by 3.0% q-o-q due to rising investor interest in quality mall space. 

Outlook: Demand in superior shopping malls to remain robust

Rents and capital values in organised malls are expected to increase in the coming quarters as superior malls with high footfall continue to witness low vacancy levels as well as high demand for space. Upcoming malls are also expected to garner healthy traction from retailers, especially in the under-served retail corridors in the city suburbs.

Two new shopping malls totalling around 0.58 million sq ft are expected to open in the Suburbs submarket by end 2024.

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