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The supply stock in the retail industry increased by 148 per cent to 1.09 million square feet in the first six months of CY2023 from 0.44 million square feet in the same period last year, while total leasing stood at 2.87 million square feet compared to 2.31 million square feet (year over year), according to a CBRE report.
Additionally, boosted by an increase in the appetite of shoppers, the top eight cities saw an 8 per cent growth in mall completions on a half-yearly basis. Bengaluru, Delhi-NCR, and Ahmedabad collectively accounted for a cumulative share of 65 per cent in leasing activity.
Leasing activity
During the April-June’23 quarter, total leasing stood at 1.3 million sq. ft. The combined share of Bengaluru and Delhi-NCR in retail space leasing stood at 59 per cent. The leasing activity during the quarter was primarily driven by fashion and apparel with a 38 per cent share; the food & beverage sector accounted for an 18 per cent share, both luxury and home, and department store sectors held an 11 per cent share; and the consumer electronics sector accounted for 7 per cent of the leasing activity during this period, according to the report.
“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, Southeast Asia, Middle East, & Africa, CBRE.
Moreover, the share of leasing activity was led by domestic firms (75 per cent), followed by retailers from APAC (12 per cent), EMEA (10 per cent) and America (3 per cent).
“With construction costs staying elevated, developers and investors are likely to explore redevelopment and redesign of existing spaces, particularly in prime locations with high occupancies and rents. This approach enables them to maximise the potential of these areas while managing costs effectively. In addition, tier-II cities are expected to gain greater traction as retailers recognise the potential of these markets,” said Ram Chandnani, Managing Director, Advisory & Transactions Services, CBRE India.
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