Retail leasing in India increased by 114% year-on-year between January-September 2022, primarily driven by fashion and apparel brands, shows a recent report by real estate consulting firm, CBRE South Asia. The report highlights the growth, trends and dynamics across all segments of the real estate sector in India.
According to the report, titled ‘India Market Monitor – Q3 2022’, supply grew by 102% Q-o-Q in Q3 2022.
Among the cities, Hyderabad (29%), Delhi-NCR (25%), Mumbai (13%) and Bangalore (12%) together accounted for 79% of the overall retail space absorption, the report points out.
Fashion and apparel retailers continued to drive the leasing activity, with a share of 46% in Q3 2022. Other prominent categories that led absorption during Q3 2022 included food & beverage (13%), followed by consumer electronics (9%).
Annual rentals rise in select pockets
The report also reported quarterly rental growth in select pockets of Delhi-NCR (Green Park 5-7%), Ahmedabad (Prahlad Nagar 3-5%) and Mumbai (South Mumbai 1-2%). The regional share of leasing activity was led by domestic corporates (73%), EMEA corporates (16%), American corporates (9%) in Q3 2022.
Anshuman Magazine, chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE: “Nearly 40% Y-o-Y growth in leasing activity was observed in the retail sector in Q3 2022, and 114% Y-o-Y between January-September 2022. Owing to the high growth potential, we expect many international brands to continue to view India as a growth market.”
Ram Chandnani, managing director, Advisory & Transactions Services, CBRE India, said “Retail leasing is expected to further strengthen during the current festive season. In Q3 2022, the overall retail absorption and supply was 1.1 mn sqft. and 0.5 mn sqft. respectively. Strong leasing momentum across Hyderabad, Delhi-NCR, Mumbai and Bangalore indicates regained retailer confidence and expansion potential.”
The report forecasts that leasing will strengthen further considering the festive season as international and domestic brands are expected to continue to expand.
The report also points out that Tier-II, Tier-III and even Tier-IV locations will gain traction as retailers look to leverage the spending power of these towns and cities.
Despite a robust supply pipeline, lack of ready quality supply, especially in prime locations, may impact retailer sentiments, it adds.
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