Retail space leasing climbs 24% in first half of 2023: CBRE

Retail space leased during the first half of this calendar year rose to 2.87 million square feet, with Bengaluru, the National Capital Region and Ahmedabad accounting for a 65 percent share of the deals,

Retail space leased during the first half of this calendar year rose to 2.87 million square feet, with Bengaluru, the National Capital Region and Ahmedabad accounting for a 65 percent share of the deals, CBRE said in a report.

Retail leasing grew 24 percent from 2.31 million sq. ft a year earlier and 15 percent from the July-December 2022 period.

Mall supply during the January-June 2023 period more than doubled to 1.09 million sq. ft from 0.44 million sq. ft a year earlier, according to the report titled India Market Monitor Q2 2023, released on July 25.

The increased appetite of shoppers led to an 8 percent growth in mall completions in the top eight cities on a half-yearly basis. Ahmedabad led the growth in supply addition with a 73 percent share, followed by the NCR at 20 percent.

During the April-June quarter, total leasing stood at 1.3 million sq. ft, with the combined share of Bengaluru and NCR at 59 percent. During this period, Bengaluru captured a 35 percent share in overall leasing, followed by the NCR with a 24 percent share, while Chennai secured a 14 percent share. Hyderabad claimed 11 percent.

CBRE said quarterly mall rentals grew in select areas of Kolkata (South Kolkata 13-18 percent, East Kolkata 8-12 percent) and Bengaluru (East Bengaluru 0-2 percent).

Promising outlook

Rentals in high street stores in west and east Kolkata increased by 10 percent to 15 percent. In Bhopal and Ahmedabad, rental growth was 9-13 percent. Rentals increased 4-8 percent on Golf Course Road in Gurgaon, and by 1-4 percent on 100 Feet Road, Indiranagar, in Bengaluru.

Leasing during the quarter was driven primarily by fashion and apparel stores with a 38 percent share. The food and beverage sector accounted for an 18 percent share, the luxury and home and department store sectors held an 11 percent share each, while consumer electronics accounted for 7 percent of the leasing activity during this period, the report showed.

“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,” said Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE.