Mumbai records increase in retail leasing by 42% Y-o-Y in Jan-Jun’24

July 30, 2024: Real estate consulting firm CBRE South Asia , recent report titled India Retail Figures H1 2024 mentioned that Mumbai recorded an increase in retail leasing by 42% Y-o-Y across malls, and high-streets in Jan-Jun’24. According to the report that highlighted real estate growth, trends and dynamics across the retail sector in India, Mumbai’s total leasing during Jan- Jun’24 stood at 0.3 million square feet (msf)  compared to 0.2 msf in the corresponding period last year. During this period, among the tenant sectors in Mumbai, fashion and apparel led with a 46% share, followed by food & beverage at 12% and luxury with a 5% share.

Key lease transactions recorded in Mumbai 

Making a mention of other cities, the report pointed that on a pan India basis, retail leasing soared 5-year high in Jan- Jun ‘24, taking 3.1 msf across eight cities compared to last 5-year H1 period.

According to the report, on an annual basis, retail leasing witnessed a growth of 7% Y-o-Y in H1 2024 to touch 3.1 msf compared to 2.9 msf in H1 2023. In H1 2024, the absorption was led by Bengaluru, followed by Chennai and Delhi-NCR, accounting for nearly 59% of the total leasing. 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. 

Strong demand for fashion and apparel products continued in H1 2024, primarily led by mid-range, value fashion and athleisure brands, resulting in a 39% share by fashion & apparel retailers during H1 2024, highlighted the CBRE report. The entertainment sector (13%) and Homeware and Department Store (11%) were the other categories that drove leasing during the review period.

According to the CBRE report, India continues to experience positive retail growth, attracting foreign retailers to establish a presence in key locations. Charles Tyrwhitt, a men’s luxury fashion brand from the United Kingdom, opened its first store in Ahmedabad. Additionally, Maison Margiela, a French luxury fashion brand, and Franck Provost, a French beauty and wellness brand, entered the Indian market by opening their first stores in Mumbai and Bengaluru, respectively. Other noteworthy expansions include the opening of stores by international brands, such as the Swiss luxury watch brand Breitling and the American luxury fashion brand Michael Kors in Chennai and Pune, respectively. In addition, the Japanese homeware brand Daiso Japan and the skincare and cosmetics brand ILEM Japan also opened stores in Chennai.

In the first half of 2024, about 0.5 msf of retail space was added across tier-1 cities. However, according to CBRE, an increase in supply in the second half of 2024 as a few investment-grade malls are set to begin operations in cities such as Bengaluru, Hyderabad, Mumbai, etc. is expected. These malls are projected to add 3 – 4 msf of new retail space in the second half of 2024.

The report highlighted that the Tier-2 cities (Chandigarh, Jaipur, Lucknow, Indore and Kochi) witnessed an overall space take-up of 0.4 msf in H1 2024, with the absorption being dominated by Indore and Kochi, accounting for a joint share of 56% share, followed by Lucknow and Chandigarh, each with 17% share.

According to the CBRE report, during the Apr-June’24 quarter, total leasing stood at 1.2 msf. The combined share of Hyderabad, Chennai and Delhi-NCR in retail space leasing stood at 54%. The leasing activity during the quarter was primarily driven by fashion & apparel with 38% share; homeware and department stores accounted for 16% share, entertainment with 15% share, food & beverage sector accounted for 9% share, while the consumer electronics sector accounted for 6% of the leasing activity during this period. During the Apr-June’24 period, the share of leasing activity was led by domestic firms (76%), followed by EMEA retailers (.12%), American retailers (7%), and APAC (5%). 

Anshuman Magazine, chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE, said, “Retail absorption increased in the first half of the year on an annualized basis. The ongoing introduction of quality supply is expected to continue stimulating an uptick in overall space take-up in the coming quarters.

Going forward, ongoing infrastructure development and rising passenger traffic unlock a significant opportunity for nationwide transit retail expansion”.

Ram Chandnani, managing director, advisory & 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”.