As per a new report from CBRE South Asia, Delhi-NCR and Bangalore are the two most sought-after destinations for retail brands looking to expand in India, with over 60% of the annual and half-yearly leasing activity taking place in these two regions. The annual retail leasing saw a seismic growth of 21% YoY and touched 4.7 million sq. ft. in 2022, while rental leasing activity stood at 2.43 million sq. ft. in H2 2022, an increase of 5% on a half-yearly basis. The report highlights the growth of retail space leasings in commercial projects, high-street structures, and mixed-use establishments, with Delhi-NCR and Bangalore leading the pack.
Despite the growing presence and prominence of online retail stores and sites, the phenomenon did not have a subsidiary impact on the offline store setups and leasings as it reigns supreme in the post-pandemic era. The fashion and apparel brands are in an expansionary mindset mode and took the lion’s share of over 42% in overall leasing in July-December 2022, according to the India Retail Figures H2 2022 study.
Sumit Agarwal, Director Sales & Leasing at Bhutani Grandthum, said: “Urban cities and towns have seen a rapid increase in population with good income equity, which inevitably creates a satiable desire for commercial and retail projects in the vicinity. The national and international brands are locking deals and taking up spaces in newly launched commercial projects as they want to tap into the untapped demographics and turn them into lifelong consumers.”
The report also shows that rental space prices have increased by 4-8% in specific locations of Delhi-NCR and Bangalore, yet there is a record-breaking rise in retail space bookings by F&B brands, hypermarkets, and entertainment-centric brands in commercial real estate circuits. The study has also thrown light on the insurgence of international brands’ share in India’s retail space leasing activity, reflecting the evolution of consumer taste and liking in India.
Pankaj Kumar Jain, Director of KW Group, said: “The positive demand in retail space leasing has brought significant traction to commercial real estate post-pandemic and will only increase by greater margins in the upcoming quarters. The advent of new investors, luxury, and international brands and further expansion of existing brands to new locations in Delhi-NCR are signs of a blooming period ahead. The urban demography statistics and the overall buoyant demand will continue to attract new players in the industry.”
The report also states that over 60% of international retail brands have expanded their regional presence and established stores in metro cities as well as Tier 1 and Tier 2 cities to cater to new customer verticals in the bid for territorial market expansion and the creation of value-based engagement. The diverse nature and quality of commercial real estate projects have outpaced the nondescript buildings and brick-and-mortar structures of earlier times, making them more attractive to consumers.
Ravinder Choudhary, Assistant Vice President at Vegas Mall, said: “The retail space leasing records a spectacular comeback post-Covid-19. It has seen a constant upward graph and refuses to slump. The malls are places of art, culture, and entertainment, and this belief has seen a major restoration in current times. People have flocked to malls and commercial spaces for entertainment, shopping, and enjoying a holistic retail experience, comprising national and multi-national brands.”
In conclusion, the report reveals that India’s retail real estate industry is experiencing significant growth, driven by the expansion of national and international brands, the growth of urban areas, and the increasing demand for commercial and retail spaces.