Retail sector records strongest leasing in 5 years, fashion- apparel categories shine: report
Jul 30, 2024
New Delhi [India], July 30 : Retail leasing activities in the country have soared to a five-year high in the first half of the current year, CBRE South Asia Pvt. Ltd observed in its latest report.
Retail leasing between January and June 2024 witnessed 3.1 million sq. ft. across eight cities compared to the last 5-year H1 period.
According to the report, retail leasing activities in the country recorded a growth rate of 7 per cent in the first half (H1) of 2024, reaching 3.1 million sq. ft., compared to 2.9 million sq. ft. in the same period last year.
During the first half, the absorption was led by Bengaluru, followed by Chennai and Delhi-NCR, which accounted for nearly 59 per cent of the total leasing.
The report further highlighted that in the coming quarters, the influx of investment-grade mall supply will influence primary leasing trends, while leading malls across key cities will continue to witness strong demand for secondary spaces.
The fashion and apparel products categories continue to exert strong demand, as the report added that in the first half of 2024, the share of this segment in overall retail leasing remained at 39 per cent.
The entertainment sector with 13 per cent, and homewares and department stores with 11 per cent, were the other categories that drove leasing during the review period, the report noted.
Indian cities are also attracting global retailers, as highlighted by the report. Global retailers such as Charles Tyrwhitt, Maison Margiela, and Franck Provost entered the Indian market in this period. Other major global retailers from Switzerland, America, and Japan have also expanded their presence in India, it noted.
Expecting the momentum to continue, the report added, "Leasing in strategic locations is expected to remain steady, with a healthy mix of primary and secondary leasing projected to continue at a consistent pace."
In the first half, about 0.5 million sq. ft. of retail space was added across tier-I cities, as per the report.
Tier-II cities witnessed an overall space take-up of 0.4 million sq. ft. in H1, with the absorption dominated by Indore and Kochi, accounting for a joint share of 56 per cent, followed by Lucknow and Chandigarh, each with a 17 per cent share.
Ram Chandnani, Managing Director, Advisory and Transactions Services, CBRE India, said, "Steady retail leasing activity was witnessed in Q2 2024 on a quarterly basis. However, the ongoing introduction of quality supply is expected to continue stimulating an uptick in overall space absorption in the coming quarters. A growing number of direct-to-consumer (D2C) brands are recognising the importance of establishing a physical presence to complement their online operations. Developers are closely monitoring these brands with robust online customer bases and exploring opportunities to integrate them into physical retail formats."
