Retail sector leasing grows 130% across 8 cities in January-March

Leasing by retailers grew by 130 percent to 1.5 million square feet in the January-March quarter across eight cities

Leasing by retailers grew by 130 percent to 1.5 million square feet in the January-March quarter across eight cities, led by fashion & apparel and homeware & department stores, on expectations of expansion due to increased consumption, according to a new report.

Ahmedabad led the retail leases with a 27 percent share, followed by the National Capital Region, including New Delhi, at 26 percent, while Bengaluru and Chennai had 14 percent each, CBRE South Asia said in a report titled India Market Monitor – Q1 2023. The cumulative leasing share of these cities stood at 81 percent.

The rest of the leased space was in Mumbai, Pune, Kolkata and Hyderabad.

"Retail supply this year is expected to surpass 2022 levels owing to pent-up supply addition, with several investment-grade projects launched in the past two years set to become operational in 2023. This would give a fillip to primary leasing, which is likely to be the main demand driver for retail space in 2023,” said Anshuman Magazine, chairman and CEO - India, South-East Asia, Middle East and Africa, CBRE.

In terms of space supply addition, Ahmedabad led with a 73 percent share, followed by the NCR at 20 percent.

According to the report, the fashion & apparel segment had the biggest share of leasing at 31 percent, followed by homeware & department stores at 19 percent, food & beverages at 11 percent, luxury at 8 percent, and consumer electronics at 5 percent.

“We believe that retailers will seek spaces beyond conventional malls and high streets to diversify their location plans, thereby enabling supply chain modifications and facilitating customers to shop for any product at any time. Furthermore, omnichannel initiatives such as metaverse and social commerce will witness greater traction," said Ram Chandnani, managing director, advisory and transactions services, CBRE India.