July 26, 2024: During the second quarter (Q2) of 2024, the leasing activity by retailers in organised retail centres and key high streets across the top seven cities experienced a surge, according to the latest report by JLL. While certain discretionary retail categories have faced a slowdown in consumption growth in recent quarters, retailers have responded by closing unviable stores and expanding strategically. There has been positive momentum in leasing during Q2 2024 as brands continue to expand in newer micro markets and launch new formats, especially in the value fashion segment. Additionally, there is a noticeable expansion in premium, super premium and bridge to luxury segments as well.
Leasing activity rose to 2.2 million square foot (msf) in Q2 2024, exhibiting a remarkable 100% increase compared to the previous quarter (Q1 2024). This positive momentum translated into a robust H1 2024, resulting in an impressive cumulative leasing transaction of 3.3 msf, up by 20% YoY. The surge in leasing activity can also be attributed to retailers proactively securing leases in newly completed Grade A projects that were launched by established developers and institutional owners during last year. In addition, retailers also expanded in organised high streets and newer evolving catchments.
Dr Samantak Das, chief economist and head of research and REIS, India, JLL, said, “The first half of 2024 saw domestic brands taking the lead in the retail market, accounting for an impressive 80% of the gross leasing. Among the international brands, Europe, Middle East, and Africa (EMEA) based retailers dominated the gross leasing, having more than 50% of the share, while the Americas accounted for 27% and APAC for 21%. Additionally, India’s appeal as a retail destination was strengthened with the opening of nine international brands’ maiden stores, primarily focusing on expansion in Delhi NCR and Mumbai.”
The expansion of leading fashion and apparel chains in the value and super-value segments, along with the introduction of new formats and brands, has contributed to the Fashion and Apparel segment capturing the highest share (38%) in leasing activity in the first half of 2024 (January-June). Within this segment, the mid-segment accounts for the highest share (56%) of the leasing activity, followed by the affordable segment with a significant share of 28%.
Notably, the F&B and entertainment segments together represented approximately 30% of the leasing volume in H1 2024, highlighting the growing significance of these categories in retail destinations. These categories are transforming shopping malls into vibrant and captivating spaces that go beyond mere shopping experiences. It is seen that developers have started dedicating a larger portion of their spaces to F&B and entertainment. The goal is to create an engaging and immersive environment that stimulates place-making in retail developments.
Rahul Arora, head of office leasing and retail services, India, and senior managing director (Karnataka, Kerala), JLL, said, “Bangalore, Delhi-NCR and Mumbai stood out as the leading cities in terms of gross leasing, accounting for a combined share of 62% in H1 2024. Bangalore stood out among these cities, recording almost double the leasing activity in Mumbai and Delhi-NCR. With a remarkable 1 msf of transactions, the city showed significant leasing activity in prominent retail centres and key high streets. Additionally, it is interesting to observe that Bangalore and Mumbai had the largest proportion of gross leasing in the Fashion and Apparel segment, while Delhi-NCR stood out in the F&B segment.”
Given the positive demographics, stable economy and the projected completion of high-quality retail developments within the next five years, the outlook for the retail segment is bright. India is likely to remain a key market for global brands looking to expand their store network. As the retail market in India continues to evolve, we can anticipate the growing popularity of new concepts and trends and development of more destination-oriented shopping malls which act as social meeting places and entertainment hubs.
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