BackDelhi-NCR, Pune, Bengaluru lead retail leasing activity in first half of 2022
Among high streets, rents rose by about 5-12% across select locations in Delhi-NCR, Bangalore, Hyderabad, and Pune, and about 1-3% in Mumbai
PremiumNEW DELHI: Retail leasing activity in the first of the calendar year 2022 was led by Delhi-NCR and Pune, followed by Bangalore and Hyderabad, accounting for more than 70% of total retail space take-up in the period, according to estimates by real estate consulting firm CBRE.
“Fashion and apparel retailers continued to drive the leasing activity with a share of 32% in H1 2022. Other prominent categories that led the leasing activity during H1 2022 included supermarkets (12%) along with homeware and department stores (12%). The entertainment category, which was impacted the most during the pandemic, has also emerged as one of the top demand drivers during H1 2022, with an 11% share in the overall demand," according to the report.
Meanwhile, as demand has picked pace, rental values increased on a half-yearly basis in select micro-markets in most cities, the report said. This trend was visible across malls and prominent high streets.
Among high streets, rents rose by about 5-12% across select locations in Delhi-NCR, Bangalore, Hyderabad, and Pune, and about 1-3% in Mumbai. While prominent mall clusters in Pune and Delhi-NCR witnessed rental growth of 5-11% on a half-yearly basis, a marginal increase of 1-3% was reported across one mall cluster in Mumbai, the report added.
Leasing momentum is expected to pick up in the second half of the year on the back of demand for spaces in newly completed malls. “It is evident that retailers have regained confidence and are set for expansion mode. We anticipate that going forward, domestic brands will remain proactive in relocations/expansions, and a strong appetite from international retailers will continue," said Anshuman Magazine, Chairman and CEO, India, South-East Asia, Middle East & Africa, CBRE.
CBRE expects retail leasing to touch 6-6.5 million sq. ft. in 2022, twice the space leased in 2021. Additionally, given the tremendous growth potential, there is expectation that many international brands will launch stores in tier II and III markets, said Magazine.
Accounting for nearly an 85% share in the overall investment-grade mall completions, Hyderabad, Delhi-NCR, and Bangalore are expected to dominate retail supply addition in the second half, said Ram Chandnani, Managing Director, Advisory and Transactions Services, CBRE India.
“Moreover, Mumbai and Chennai are also anticipated to witness supply addition. Among the consumer segment, fashion and apparel retailers will continue to expand their physical sales networks and pay particular attention to enhancing flagship stores," he said.
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