A businessman puts a indian rupee money bag near the houses. Investments in real estate assets. Municipal budget of the city. Official. Construction industry, rental business and hotel tourism. istock photo for BL
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Andrii Yalanskyi
Chennai’s retail real estate market continued its positive momentum in Q1 2025, recording 0.17 million sq ft (msf) of leasing activity, reflecting a 31 per cent year-on-year (y-o-y) growth, according to a report by Cushman & Wakefield, a real estate services firm.
Main streets dominated the market, contributing over 90 per cent of total leasing activity, with the North-West submarket leading at 38 per cent, followed by off-commercial business district (CBD) with 37 per cent.
Key retail locations such as Anna Nagar, T. Nagar, Perambur, Arcot Road and Aminjikarai witnessed strong leasing traction. Fashion (37 per cent) and accessories & Lifestyle (32 per cent) were the leading demand drivers, with fashion retail growing nearly four times y-o-y, signalling strong expansion by national brands, the company said.
Despite rising demand, mall leasing activity remained subdued at 0.01 msf, attributed to limited supply of quality space. The mall vacancy rate marginally declined by 14 basis points (q-o-q) to 14.13 per cent, with superior malls maintaining tight vacancy levels of 1-2 per cent.
The CBD and North-West submarkets contributed 72 per cent of total mall leasing activity. Rental trends showed 3-4 per cent q-o-q appreciation in high-street locations, including Usman Road North, Usman Road South, Adyar Main Road, Purasawalkam High Road, Pondy Bazaar, Velachery, and ECR, due to strong demand from expanding retailers, the report said.
At the national level, the report highlighted that Hyderabad was the frontrunner in terms of leasing volume, contributing 34 per cent (0.8 MSF) of the total leasing activity, with a 106 per cent y-o-y growth. Mumbai followed closely, accounting for 24 per cent (0.58 MSF) of the total leasing volume and recorded a 259 per cent y-o-y growth, largely owing to the emergence of new high street locations and the addition of new mall supply.
Delhi NCR also saw significant traction, capturing 17 per cent (0.41 MSF) of the total leasing share, supported by strong demand in key submarkets and a 57 per cent y-o-y increase. Retail activity here was largely led by premium brands, dining and entertainment concepts, reinforcing its status as a high consumption market, the report said.
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Published on April 9, 2025
