BackRetail leasing surges by 24% YoY in Jan-Jun; supply jumps 148%: Report
CBRE sees a consistent growth in secondary leasing, while primary leasing is likely to pick up pace, fuelled by a strong supply pipeline and the forthcoming festive season
PremiumNew Delhi: Retail leasing in India witnessed a 24% year-on-year growth during the first half of 2023, reaching a staggering 2.87 million square feet, according to a CBRE report.
The report, titled ‘India Market Monitor Q2 2023’, highlights a strong momentum in retail leasing throughout H1 2023, witnessing a 15% rise compared to H2 2022.
“We foresee a consistent growth in secondary leasing, while primary leasing is likely to pick up pace, fuelled by a strong supply pipeline and the forthcoming festive season," said Anshuman Magazine, chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE. He further pointed to increased traction in the luxury sector due to the potential entry of more international brands across various categories.
Bangalore, Delhi-NCR, and Ahmedabad were the key players in this growth story, collectively constituting 65% of total leasing activity in H1 2023. Complementing this was a whopping 148% YoY surge in retail space supply. Ahmedabad was the frontrunner in this supply boom, holding 73% of the growth, followed by Delhi-NCR at 20%.
India’s top eight cities saw an 8% growth in mall completions half-yearly, addressing the rising needs of consumers nationwide. The second quarter of 2023 alone saw total leasing activity amounting to 1.3 million square feet, with Bangalore taking the lion’s share at 35%.
Fashion and apparel were the most significant contributors, taking up 38% of leasing activity in Q2 2023. Food and beverage followed at 18%, while luxury, home & department stores each took up 11% share. Consumer electronics contributed 7% in this quarter.
“As construction costs continue to soar, developers and investors are likely to seek redevelopment and redesigning of existing spaces, especially in prime locations with high rents and occupancies. Additionally, we anticipate a growing interest in tier-II cities as retailers acknowledge their potential," said Ram Chandnani, Managing Director, Advisory & Transactions Services, CBRE India.
The study also said domestic firms were leading the leasing activity, holding a 75% share. Asia-Pacific retailers took up 12%, while those from Europe, the Middle East, and Africa accounted for 10%. American retailers represented a mere 3% of total leasing activity during H1 2023.
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