Mall leasing falls 37.8% in Q3 across top eight cities

Mall leasing fell 37.8% YoY to 0.71 million sq ft while overall retail leasing hit 2.22 million sq ft in the top eight cities. Main-street deals dominated at 67.9%. Year-to-date leasing stayed almost flat at 6.57 million sq ft. Domestic retailers took 86.3% of the quarter’s volume; fashion led category demand.

For a brand manager this means longer waits for quality mall space and higher reliance on high-street or shop-in-shop deals to hit store targets. A typical new Zudio or lifestyle outlet may now open on a main road rather than inside a mall, changing fit-out costs and footfall patterns.

Mall leasing dropped 37.8% YoY as main streets took nearly 68% of Q3 volume.

The crunch helps landlords of existing Grade-A malls hold rents but squeezes expansion plans of international and domestic fashion chains that prefer controlled mall environments. It also boosts pure main-street specialists and franchise models.

Watch Q4 festive leasing numbers and any announcement of delayed mall openings; three quarters without new Grade-A supply has already shifted the mix.