Retail leasing activity surged by 5% to 2.43 million sq. ft in Jul-Dec ‘22 as against 2.31 million sq. ft. reported in Jan- Jun ’22 period, mentioned ‘India Retail Figures H2 2022’, a report by CBRE South Asia Pvt. Ltd that highlighted the growth, trends, and dynamics across the retail sector in India. Overall, in 2022, leasing activity in the retail sector grew by 20% Y-o-Y to 4.7 million sq. ft, the report pointed.
As per the report, fashion and apparel retailers continued to expand their footprint, accounting for a share of more than 42% in overall leasing in Jul-Dec ‘22. Other prominent categories that continued to drive leasing activity during Jul-Dec ‘22 included food and beverage (12%), along with hypermarket (7%) categories. The entertainment category, which was impacted the most during the pandemic, also emerged as one of the top demand drivers during Jul-Dec ‘22 with 6% share in overall space take-up.
Physical retail gains prominence
The report elaborated on how shoppers returned to physical retail as cities began reopening after tapering of COVID-19 with shoppers increasingly opting for ‘hybrid commerce’- a mix of offline and online retail.
Despite the continued growth of online retail, physical retail continues to gain prominence among Indian shoppers. As a result, strong footfalls led to expansionary space take-up by domestic and international retailers, especially during Jul-Dec ‘22
Bangalore and Delhi-NCR, followed by Chennai and Mumbai, led leasing activity, together accounting for almost 80% of the overall space take-up during Jul-Dec ’22 period.
Anshuman Magazine, chairman and CEO – India, South-East Asia, Middle East and Africa, CBRE, “The Indian retail sector is recovering, and we anticipate that it will continue to gain momentum through 2023. Even amid difficult global economic conditions, international brands are expanding not only in tier-I cities but also penetrating tier-II & III cities as they see India as a potential market.”
Ram Chandnani, managing director, advisory and transactions services, CBRE India, said, “As the cities started to reopen after the pandemic, many shoppers returned to physical retail and since then have adopted ‘hybrid commerce’. Sales in Jul-Dec ‘22 surpassed the pre-pandemic levels owing to increased consumer confidence, leading to a hike in spending. Leasing momentum is expected to further pick up in Jan-Jun ‘23 owing to anticipated space take-up in newly completed malls.”
Rental values inched up
Additionally, rental values inched up on a half-yearly basis in certain micro-markets across most cities, driven by robust retail demand. Among high streets, rents rose by about 4-8% across select locations in Delhi-NCR, Bangalore, by 4-12% in Ahmedabad and by about 1-3% in Mumbai. Meanwhile, prominent mall clusters in Delhi-NCR and Bangalore witnessed rental growth of 3-15% and 2-6% respectively.
