Leasing of retail real estate spaces more than doubled to 1.5 million square feet in January–March across eight cities as retailers looked to expand amid a revival in consumption, according to CBRE India.
Real estate consultant CBRE South Asia Pvt. on Tuesday released 'India Market Monitor—Q1 2023,' stating that retail sector leasing grew by 130% year-on-year to 1.5 million square feet in January–March 2023.
Ahmedabad led the absorption with a 27% share, followed by Delhi-NCR at 26%, and Bengaluru and Chennai at 14% each.
The data includes space take-up in investment-grade malls, prominent high streets, and standalone developments.
Anshuman Magazine, Chairman & CEO, India, South-East Asia, Middle East, and Africa, CBRE, said, "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".
As per the data, the leasing of retail space in Delhi-NCR rose to 0.39 million square feet in January–March from 0.07 million square feet in the year-ago period.
In Mumbai, the demand for retail space jumped to 0.10 million square feet from 0.02 million square feet. Ahmedabad, too, witnessed a sharp jump to 0.40 million square feet from 0.01 million square feet.
Similarly, in Hyderabad, the leasing of retail space rose sharply to 0.07 million square feet from 0.01 million square feet.
The leasing of retail space in Chennai increased to 0.21 million square feet from 0.07 million square feet. The demand in Kolkata remained flat at 0.02 million square feet.
However, the absorption of retail space in Pune fell to 0.09 million square feet from 0.2 million square feet.
The leasing of retail space in Bengaluru declined to 0.21 million square feet in January–March 2023 from 0.26 million square feet in the corresponding period of the previous year.
According to the report, the fashion and apparel segment had a majority share in total leasing activity at 31%, followed by homeware and department stores at 19%, F&B (food and beverages) at 11%, luxury at 8%, and consumer electronics at 5%.
Ram Chandnani, Managing Director, Advisory & Transactions Services, CBRE India, said, "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, he said omni-channel initiatives such as metaverse and social commerce will gain greater traction.
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