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CBRE South Asia Pvt. Ltd., India’s leading real estate consulting firm, announced the findings of its report, ‘India Retail Figures H1 2024’. The report highlights real estate growth, trends, and dynamics across the retail sector in India.
According to the report, retail leasing soared 5-year high in Jan- Jun ‘24, taking 3.1 mn. sq. ft. across eight cities compared to last 5-year H1 period. On an annual basis, retail leasing witnessed a growth of 7% Y-o-Y in H1 2024 to touch 3.1 mn. sq. ft, compared to 2.9 mn. sq. ft. in H1 2023. In H1 2024, the absorption was led by Bengaluru, followed by Chennai and Delhi-NCR, accounting for nearly 59% of the total leasing. In the coming quarters, the influx of investment-grade mall supply will influence primary leasing trends, while leading malls across key cities will continue to witness strong demand for secondary spaces. Strong demand for fashion & apparel products continued in H1 2024, primarily led by mid-range, value fashion and athleisure brands, resulting in a ~39% share by fashion & apparel retailers during H1 2024. The entertainment sector (~13%) and Homeware and Department Store (~11%) were the other categories that drove leasing during the review period.
India continues to experience positive retail growth, attracting foreign retailers to establish a presence in key locations. Charles Tyrwhitt, a men's luxury fashion brand from the United Kingdom, opened its first store in Ahmedabad. Additionally, Maison Margiela, a French luxury fashion brand, and Franck Provost, a French beauty and wellness brand, entered the Indian market by opening their first stores in Mumbai and Bengaluru, respectively. Other noteworthy expansions include the opening of stores by international brands, such as the Swiss luxury watch brand Breitling and the American luxury fashion brand Michael Kors in Chennai and Pune, respectively. In addition, the Japanese homeware brand Daiso Japan and the skincare and cosmetics brand ILEM Japan also opened stores in Chennai.
In the first half of 2024, about 0.5 million sq. ft. of retail space was added across tier-I cities. However, we expect an increase in supply in the second half of 2024 as a few investment-grade malls are set to begin operations in cities such as Bengaluru, Hyderabad, Mumbai, etc. These malls are projected to add 3 – 4 million sq. ft. of new retail space in the second half of 2024.
Tier-II cities (Chandigarh, Jaipur, Lucknow, Indore and Kochi) witnessed an overall space take-up of 0.4 million sq. ft. in H1 2024, with the absorption being dominated by Indore and Kochi, accounting for a joint share of ~56% share, followed by Lucknow and Chandigarh, each with ~17% share.
During the Apr-June’24 quarter, total leasing stood at 1.2 mn. sq. ft. The combined share of Hyderabad, Chennai and Delhi-NCR in retail space leasing stood at 54%. The leasing activity during the quarter was primarily driven by fashion & apparel with 38% share; homeware and department stores accounted for 16% share, entertainment with 15% share, food & beverage sector accounted for 9% share, while the consumer electronics sector accounted for 6% of the leasing activity during this period.
During the Apr-June’24 period, the share of leasing activity was led by domestic firms (76%), followed by EMEA retailers (12%), American retailers (7%), and APAC (5%).
Leasing in strategic locations is expected to remain steady, with a healthy mix of primary and secondary leasing projected to continue at a consistent pace.
Segments such as jewellery, mid-range fashion & apparel, and gaming centres are experiencing significant growth, driving increased demand for retail spaces and larger formats. Millennial preferences are fuelling the expansion of mid-range fashion brands and gaming centres, leading to larger store sizes. Organized jewellery retailers are seeing similar trends as consumers shift their purchasing habits.
However, as vacancy levels in most key malls across most Tier I cities remain negligible, the entry of investment grade supply will dictate primary leasing trends.
Evolving lifestyles and global aspirations are driving demand for luxury goods, leading to substantial market growth fuelled by an influx of global brands. International luxury brands including Maison Margiela and Time Vallée made notable entries into the Indian market in the first half of 2024
The increasing demand from Tier II and III cities, coupled with the rise of e-commerce platforms, is further enhancing the accessibility and popularity of luxury products nationwide
The direct-to-consumer (D2C) sector is experiencing robust growth, driven by increased e-commerce and internet penetration, improved last-mile logistics, and a rising consumer base of millennials and Gen Z. To harness this growth, D2C brands are employing data-driven strategies and focusing on delivering seamless customer experiences.
A growing number of D2C brands are acknowledging the significance of establishing a physical presence alongside their online operations, aiming to offer customers a seamless multi-channel shopping experience. Developers are closely monitoring D2C brands with a robust online customer base and are actively exploring opportunities to venture into online formats.
Transit retail poised for substantial growth Ongoing infrastructure development and increasing passenger traffic present significant opportunities for the expansion of transit retail nationwide.While airports are witnessing considerable development, much of the retail potential at other transit hubs—metros, railways, highways, and bus stations—remains untapped.
India's ambitious plan to expand its airport infrastructure to 300 airports by 2047, driven by expectations of substantial passenger traffic growth, underscores this potential, according to a draft plan by the Airports Authority of India (AAA). Consequently, transit retail, especially at airports, is poised for substantial growth.
