Chennai's retail real estate market recorded a substantial 31 per cent year-on-year growth in leasing activity during the first quarter of 2025, totaling 0.17 million square feet, as reported by Cushman & Wakefield. This surge was predominantly driven by the fashion sector, which accounted for 37 per cent of the total leasing activity, marking a nearly fourfold increase compared to the same period last year.
High Streets Dominate Leasing Activity
High street locations were the focal point of this growth, contributing over 90 per cent of the total leasing activity. The North-West submarket, including prominent areas like Anna Nagar and Perambur, led with a 38 per cent share, while the Off-CBD region, encompassing Arcot Road and Aminjikarai, followed closely at 37 per cent.
Limited Mall Leasing Due to Supply Constraints
In contrast, mall leasing activity remained subdued, with only 10,000 square feet transacted during the quarter. This was primarily due to a limited supply of quality space, leading to a marginal decline in the mall vacancy rate by 14 basis points quarter-on-quarter to 14.13 per cent. Superior malls maintained tight vacancy levels of one to two per cent.
Rental Appreciation in Key Retail Corridors
High-demand high street corridors experienced rental appreciation of three to four per cent quarter-on-quarter. Notable areas with increased rentals include Usman Road (North and South), Adyar Main Road, Purasawalkam High Road, Pondy Bazaar, Velachery, and East Coast Road (ECR).
National Retail Leasing Trends
On a national level, Hyderabad led in leasing volume, contributing 34 per cent (0.8 million square feet) of the total activity, with a 106 per cent year-on-year growth. Mumbai followed with a 24 per cent share (0.58 million square feet), recording a 259 per cent year-on-year growth, driven by new high street locations and additional mall supply. Delhi NCR captured 17 per cent (0.41 million square feet) of the total leasing share, supported by strong demand in key submarkets and a 57 per cent year-on-year increase.
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