Small spaces dominate US retail leases in Q1 2024: JLL report

Net deliveries remained modest at 9.5 million in the quarter for the 139 national index markets in the United States and most of the retail space under construction is pre-leased, leaving a mere 25 per cent available for lease.

Leasing activity in the period decreased due to a lack of suitable location availability. However, the leasing rate of 35.1 per cent over the last 12 months was higher than the previous year's rate, indicating robust demand, a JLL report said.

A notable trend was the preference for small spaces of less than 2,500 square feet, accounting for over two-thirds of executed leases. The size of newly executed leases fell 11.1 per cent from the previous quarter to an average of 3,027 square feet. More than two-thirds (68.5 per cent) of deals inked in the first quarter were for such small spaces.  

There has also been a growing trend for retailers seeking high-quality mall spaces, seeing healthy demand for class A malls. However, limited construction starts and moderate deliveries are expected to continue causing supply constraints in the near future.

Fibre2Fashion News Desk (DS)