CHENNAI: Chennai’s retail market face a churn as brands are once again moving back to standalone buildings with large neons and windows at prime locations in the city, and driving up rents on some of the most sought-after shopping corridors, according to a report by property consultant Cushman and Wakefield. The report also highlights that the shift is in part shaped by a shortage of quality mall space as no new mall has opened in Chennai since 2023.
Vacancy in grade A malls is now only 1-2%, according to the report, leaving much of the leasing activity to tenant churn rather than fresh capacity. Across grade A and B+ malls, vacancy stood at 5.8% out of the city’s 46.9 lakh sq ft stock, indicating that much of the available space is concentrated in lower-grade centres.
As for spaces at prime locations, the asking rent on the Cathedral Road-RK Salai stretch rose 35% in the year to `175 per sq ft a month in the third quarter, the sharpest annual increase among the 14 prime high streets tracked by Cushman & Wakefield. The rise came as retailers competed for limited space in established high streets and grade A malls.
Ajith Chordia, past chairman of Credai and MD of Olympia Group, said the shortage of mall space was also being reinforced by changing preferences among large retailers. Brands under the Tata Group like Zudio and Croma are increasingly taking standalone buildings, he said.
Retail leasing in Chennai totalled 1.8 lakh sq ft during the quarter, down 9% from the previous quarter but 12% higher than a year earlier. High streets accounted for 82% of the take-up. The north-west submarket led with 35%, followed by off-central business district and peripheral south at 22% each.
Jewellers were at the forefront of expansion. Accessories and lifestyle, a category dominated by jewellery, accounted for 42% of retail demand, followed by food and beverages at 27%, and fashion at 13%. Jewellery brands alone accounted for about 30% of high-street leasing. Kalyan Jewellers took 15,000 sq ft in Anna Nagar, while Regal Jewellery leased 19,800 sq ft in T Nagar. Zudio took another 13,000 sq ft in Anna Nagar. Chordia said high land costs and development constraints make standalone mall projects difficult to justify financially.
