In July-December 2022, retail leasing across India grew by 5 percent on a half-yearly basis touching 2.43 million square feet (msf) across key investment–grade malls, high streets and standalone developments, according to CBRE India Retail Figures H2 2022 report. Driven by newly operational malls Bengaluru led the retail leasing activity during the period touching 0.91 msf, the report said.
Additionally, Bengaluru and Delhi-NCR followed by Chennai and Mumbai together accounted for almost 80 percent of the overall space take-up during the same period. The Delhi-NCR region saw absorption of 0.54 msf of space, It was followed by Chennai reporting 0.26 msf, Mumbai 0.22 msf and Hyderabad 0.21 msf of absorption of space, according to the report.
On a pan-India basis, retail leasing grew by 21 percent year-on-year (YoY) in 2022 to 4.7 msf while supply stood at 1.45 msf, the report said.
“During the same period, supply grew by 129 percent on a half-yearly basis and was nearly at 1 msf during the July-Decmber 2022 period,” it said. The supply for Bengaluru stood at 0.80 msf.
The report highlighted that even though supply addition has decreased by 69 percent YoY during the review period, pent-up supply is expected to become operational in the first half of 2023, and the overall supply for the year is predicted to exceed the pre-pandemic levels.
Among the key retail categories, leasing was mainly driven by fashion and apparel brands with a share of 42 percent in total absorption, followed by food and beverage at 13 percent and entertainment with 11 percent share, respectively.
“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,” Anshuman Magazine, Chairman and CEO - India, South-East Asia, Middle East & Africa, CBRE said.
Ram Chandnani, Managing Director, Advisory & Transactions Services, CBRE India, added that the leasing momentum is expected to further pick up in January-June 2023 owing to anticipated space take-up in newly completed malls.
The key transactions in July-December 2022 period are: Lulu Hypermarket leased 70,000 sq ft in Forum Falcon City (Mall), PVR leased 50,000 sq ft in Forum Falcon City (Mall) and Tridom leased 50,000 sq ft in Forum Falcon City (Mall).
Meanwhile, rental values also inched up on a half-yearly basis in certain micro-markets across most cities. The rents rose by about 4-8 percent across select locations in Delhi-NCR and Bengaluru, it rose by 4-12 percent in Ahmedabad, and by about 1-3 percent in Mumbai.
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