Delhi-NCR recorded an increase in retail leasing by 65 per cent YoY across investment-grade malls, high streets and standalone developments in Jan-June’23 says a report by CBRE South Asia. As per the report, the total leasing during this period stood at 0.70 mn. sq. ft. compared to 0.42 mn. sq. ft. in the corresponding period last year. Segments like fashion & apparel players drove leasing with a share of about 47 per cent followed by luxury (13 per cent), and food & beverage (8 per cent), it said.
On a pan-India basis, retail leasing witnessed a 24 per cent YoY growth in the Jan-June’23 period, and a 15 per cent increase compared to Jul-Dec’22 period. Total leasing during Jan-Jun’23 stood at 2.90 mn. sq. ft. compared to 2.31 mn. sq. ft. (Y-o-Y). Bangalore, Delhi-NCR, and Ahmedabad collectively accounted for a cumulative share of 65 per cent in leasing activity during the first six months this year. The Jan-Jun’23 period also recorded a 148 per cent YoY increase in supply. Total supply in Jan-June’23 stood at 1.09 mn. sq. ft. compared to 0.44 mn. sq. ft.(YoY). Further, boosted by the increased appetite of shoppers, the top eight cities saw an 8 per cent growth in mall completions on a half-yearly basis. Ahmedabad led the growth in supply addition with a 73 per cent share, followed by Delhi-NCR at 20 per cent.
Recognizing the immense potential of the consumer market in India, international brands continued to reinforce their presence in the country. Apple launched its first two new stores in Mumbai & Delhi-NCR and UK-based coffee and sandwich chain Pret A Manger also opened stores in Mumbai and Delhi-NCR. Canadian coffee brand Tim Hortons which debuted in India last year strengthened its presence in Delhi-NCR and Punjab and entered the Mumbai market this year. European luxury brand Balenciaga is set to open its first brick-and-mortar store in Delhi-NCR through its partnership with Reliance Brands. Additionally, Galeries Lafayette, a leading shopping centre based in Paris, is also set to establish its presence in India by opening two stores in Mumbai and Delhi-NCR in collaboration with Aditya Birla Fashion and Retail.
Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE, said, “Despite global headwinds and looming uncertainty, India is poised for strong economic growth and sustained recovery during the endemic stage. Retailers have expressed positive leasing sentiments, indicating their strong interest in establishing new setups, expanding operations, and upgrading existing stores. The leasing performance displayed positive trends on a half-yearly basis as well, exhibiting a 15 per cent rise in space take-up compared to 2.49 million sq. ft. of leasing recorded during H2 2022. Going forward, the anticipated growth in mall supply coupled with encouraging consumer spending trends, especially during the festive season, is expected to further augment the sentiment for expansion among both international and domestic retailers who are well positioned in the market”.
Ram Chandnani, Managing Director, Advisory & Transactions Services, CBRE India, said, “The retail leasing market presented notable trends and opportunities in the first half of the year. Retail leasing is expected to touch 5.5 – 6.0 million sq. ft. in 2023, the highest level after the 2019 peak of 6.8 million sq. ft. It is expected that primary leasing in newly completed malls would remain the key driver of retail space demand in 2023. Led by strong demand for quality retail space, rental values increased on a half-yearly basis in select micro-markets across most cities. Additionally, tier-II cities are expected to gain greater traction as retailers recognize the potential of these markets”.
