July 16, 2024

Retail leasing increased by 46% YoY in Jan-Sep 23

According to the CBRE report, retail sector leasing witnessed 46% Y-o-Y growth in the Jan-Sep’23 period.

According to CBRE report, retail sector leasing witnessed 46% Y-o-Y growth in the Jan-Sep’23 period.

According to CBRE report, retail sector leasing witnessed 46% Y-o-Y growth in the Jan-Sep’23 period.

CBRE announced the findings of its latest report, ‘India Market Monitor Q3 2023’. The report highlights the growth trends and dynamics across the real estate sector in India.

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According to the report, retail sector leasing witnessed 46% Y-o-Y growth in the Jan-Sep’23 period. The total absorption across the top 8 Indian cities stood at 4.73 mn. sq. ft, compared to 3.23 mn. sq. ft. in Jan-Sep’22. Fashion & apparel and home & department stores accounted for over 50% share in leasing. In terms of cities, Bangalore, Delhi-NCR, and Pune collectively accounted for a share of over 61% in leasing activity during this period. Supply addition also recorded a 577% Y-o-Y increase in Jan-Sep’23, crossing 2.98 mn. sq. ft.

During the nine-month period (Jan-Sep’23), the fashion & apparel sector’s share in leasing stood at 34%, home & department stores at 17%, and food and beverage at 13%. Delhi-NCR, Chennai, and Pune led leasing activity in the fashion & apparel category, while home & department store leasing was highest in Pune, Ahmedabad, and Mumbai. Bangalore recorded the highest leasing share of 30% during the Jan-Sep’23 period, followed by Delhi-NCR at 19%, Pune at 12% and Chennai at 11%.

During the Jul-Sep’23 quarter, total leasing stood at 1.84 mn. sq. ft. The combined share of Bangalore and Pune in retail space leasing stood at 59%. Bangalore emerged as the frontrunner in leasing, capturing a significant 35% share, followed by Pune with a 24% share and Hyderabad with a 14% share. Delhi NCR also had an 11% share in total leasing during this period. Fashion & apparel brands led leasing activity with a 33% share in the total leasing in the top 8 cities during Jul-Sep’23, while leasing by homeware and department stores accounted for a 22% share in total leasing.

During Jul-Sep’23, the top 8 cities also saw a 100% Y-o-Y growth in mall completions. Pune led the growth in supply addition with a 58% share, followed by Delhi-NCR at 19%. During this period, the share of leasing activity was led by domestic firms (68%), followed by retailers from EMEA (22%), APAC (8%), and America (3%).

Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE, said, “As we step into the last quarter of the year, we are delighted to witness the remarkable growth in retail absorption and supply addition. With the surge in newly available spaces and the onset of the festive season, we anticipate a continued upswing in space utilization. The retail sector is on the brink of a remarkable transformation, where retailers are keen on revamping the in-store experiences with cutting-edge technology, personalized services, and space optimization. Although we expect consumer spending and retail sales to stabilize compared to the unprecedented growth of the previous year, we foresee continued growth in categories such as restaurants, hotels, transportation services, vehicle purchases, as well as apparel and footwear.”

Ram Chandnani, Managing Director, Advisory & Transactions Services, CBRE India, said, “As construction costs continue to challenge the industry, we anticipate a surge in redeveloping and reimagining existing spaces, particularly in prime locations with strong occupancies and rents. With malls becoming entertainment centres, footfalls in brick-and-mortar stores are expected to continue rising. Secondary leasing in the retail sector is also expected to remain strong and primary leasing is likely to continue gaining momentum, given the strong supply pipeline and the festive season. Additionally, we foresee Tier-II cities gaining momentum as retailers seize the opportunity to enter these promising markets, capitalizing on their potential for growth while managing operational costs. This strategic move allows them to enhance brand presence, foster customer engagement, and offer value through in-person shopping experiences.”

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