Retail leasing rises 114% Y-o-Y, crossed 3.4 mn sq ft in 9 months: Report

Hyderabad, Delhi- NCR, Mumbai, and Bangalore account for 79% of overall retail space absorption

Retail leasing in India increased by 114 per cent year-on-year and crossed 3.4 mn sq ft in the first nine months of 2022, said CBRE’s ‘India Market Monitor’ report for the third quarter.

Hyderabad, Delhi-North Capital Region (NCR), Mumbai, and Bangalore accounted for 79 per cent of overall retail space absorption. Hyderabad contributed 29 per cent, followed by Delhi-NCR with 25 per cent and Mumbai with 13 per cent. Bangalore contributed 12 per cent to the absorption.

In the third quarter (Q3), total retail space supply grew by 102 per cent quarter-on-quarter (Q-o-Q). However, total supply addition in 9 months grew almost 110 per cent year-on-year (Y-o-Y), said the report.

Fashion and apparel retailers continued to drive leasing activity, with a share of 46 per cent in Q3 2022. Other categories that led absorption during the quarter included food and beverage (13 per cent) and consumer electronics (9 per cent).

The regional share of leasing activity in the third quarter was led by domestic companies (73 per cent) and then by Europe, the Middle East and Africa (16 per cent), and American firms (9 per cent).

“Nearly 40 per cent Y-o-Y growth in leasing activity was observed in the retail sector in Q3 2022 and 114 per cent Y-o-Y between January–September 2022. Owing to the high growth potential, we expect many international brands to continue to view India as a growth market,” said Anshuman Magazine, chairman and chief executive officer, India, South-East Asia, Middle East & Africa, CBRE.

Retail leasing is expected to strengthen during the festive season. In Q3 2022, the overall retail absorption and supply were 1.1 mn sq ft and 0.5 mn sq ft respectively, said Ram Chandnani, managing director, advisory & transactions services, CBRE India.

Strong leasing momentum across Hyderabad, Delhi-NCR, Mumbai and Bangalore indicates regained retailer confidence and expansion potential, he added.

Direct-to-consumer brands are expected to lead demand. The report said that tier-II, III, and even tier-IV locations are expected to gain traction as retailers look to leverage the spending power of these towns and cities.