July 25, 2023: Real estate consulting firm CBRE South Asia announced the findings of its report India Market Monitor Q2 2023. The report highlights real estate growth, trends and dynamics across the retail sector in India.
According to the report, retail leasing witnessed a 24% year on year (YoY) growth in Jan-June’23 period and a 15% increase compared to Jul-Dec’22 period.
The total leasing during Jan-Jun’23 stood at 2.87 million square foot (msf) compared to 2.31 msf YoY. Bangalore, Delhi-NCR and Ahmedabad collectively accounted for a cumulative share of 65% in leasing activity during the first six months this year. The Jan-Jun’23 period also recorded a 148% YoY increase in supply. Total supply in Jan-June’23 stood at 1.09 msf compared to 0.44 msf YoY. Further, the top eight cities saw an 8% growth in mall completions on a half-yearly basis. Ahmedabad led the growth in supply addition with a 73% share, followed by Delhi-NCR at 20%.
| City | Jan-Jun’23 | Apr-Jun’23 |
| Delhi-NCR | 0.7 | 0.3 |
| Bangalore | 0.8 | 0.5 |
| Mumbai | 0.2 | 0.1 |
| Hyderabad | 0.2 | 0.1 |
| Chennai | 0.4 | 0.2 |
| Pune | 0.12 | 0.05 |
| Kolkata | 0.06 | 0.04 |
| Ahmedabad | 0.4 | 0.01 |
| Leasing figures in msf | ||
During the Apr-June’23 quarter, the total leasing stood at 1.3 msf. The combined share of Bangalore and Delhi-NCR in retail space leasing stood at 59%. During this period, Bangalore emerged as the frontrunner in leasing, capturing a significant 35% share in overall leasing, followed by Delhi NCR with a 24% share, while Chennai secured a 14% share. Hyderabad claimed an 11% share in total leasing during this period. The leasing activity during the quarter was primarily driven by fashion and apparel with a 38% share; food and beverage sector accounted for an 18% share, both luxury and home and department store sectors held an 11% share, while consumer electronics sector accounted for 7% of the leasing activity during this period.
During the Apr-June’23 period, the share of leasing activity was led by domestic firms -75%, followed by retailers from APAC -12%, EMEA -10% and America -3%.
Anshuman Magazine, chairman and CEO – India, South-East Asia, Middle East and Africa, CBRE, said, “Retail leasing in the first half of the year showcases a promising outlook for the coming quarters. We anticipate that secondary leasing will continue to thrive while primary leasing is set to gain momentum, driven by a robust supply pipeline and the approaching festive season. With the likelihood of more international brands entering the market across various categories, we are witnessing growing traction in the luxury segment.”
Ram Chandnani, managing director, advisory and transactions Services, CBRE India, said, “The retail leasing market presented notable trends and opportunities in the Apr-Jun quarter. With construction costs staying elevated, developers and investors are likely to explore redevelopment and redesign of existing spaces, particularly in prime locations with high occupancies and rents. This approach enables them to maximise the potential of these areas while managing costs effectively. Additionally, Tier-II cities are expected to gain greater traction as retailers recognise the potential of these markets.”
The report also highlighted quarterly rental growth in malls in select pockets of Kolkata -South Kolkata 13-18%, East Kolkata 8-12% and Bangalore -East Bangalore 0-2%. High street stores in West and East Kolkata witnessed a rental increase between 10% and 15%. In Bhopal, Ahmedabad, rental growth of 9-13% was observed. The Golf Course Road in Gurgaon also witnessed rental growth of 4-8%. Lastly, the 100 Feet Road, Indiranagar, in Bangalore, witnessed rental growth of 1-4%.
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