Leasing in Bengaluru, Chennai, and Delhi-NCR accounted for 59% share in Jan-Jun ‘24
Fashion & apparel, entertainment dominated 52% of Jan-Jun ’24 period absorption
Foreign brands, including Charles Tyrwhitt, Maison Margiela, Franck Provost, Breitling, Daiso Japan and ILEM Japan, expanded their presence in India
National – July 30, 2024 –The top real estate consultancy company in India, CBRE South Asia Pvt. Ltd., released the results of its study titled “India Retail Figures H1 2024.” The research focuses on the characteristics, trends, and growth of real estate in India’s retail industry.
| City | Jan-Jun’24 | Jan-Jun’23 |
| Delhi-NCR | 0.4 | 0.7 |
| Bengaluru | 1.0 | 0.8 |
| Mumbai | 0.3 | 0.2 |
| Hyderabad | 0.4 | 0.2 |
| Chennai | 0.4 | 0.4 |
| Pune | 0.3 | 0.1 |
| Kolkata | 0.1 | 0.1 |
| Ahmedabad | 0.2 | 0.4 |
| Leasing figures in mn sq. ft. | ||
In comparison to the previous five-year H1 period, retail leasing reportedly reached a five-year high in January–June of 24 and accounted for 3.1 million square feet across eight locations. Retail leasing had an annual increase of 7% Y-o-Y in H1 2024 to reach 3.1 million square feet, up from 2.9 million square feet in H1 2023. Bengaluru topped the absorption in H1 2024, accounting for approximately 59% of the entire leasing, followed by Chennai and Delhi-NCR. The surge of investment-grade mall supply is expected to impact principal lease trends in the upcoming quarters, while secondary spaces will continue to be in high demand at major malls in key locations. In H1 2024, the strong demand for clothing and fashion items persisted.
India’s retail industry is still expanding positively, drawing international merchants to set up shop in strategic areas. The first store of the British luxury apparel brand Charles Tyrwhitt for men was established in Ahmedabad. Furthermore, French luxury fashion house Maison Margiela and wellness and beauty brand Franck Provost opened its first boutiques in Bengaluru and Mumbai, respectively, to enter the Indian market. Other notable expansions include the inauguration of international brands’ storefronts in Chennai and Pune, for the American luxury apparel brand Michael Kors and the Swiss luxury watch brand Breitling, respectively. Additionally, Chennai now has boutiques for the Japanese skincare and cosmetics brand ILEM Japan as well as the homeware brand Daiso Japan.
Approximately 0.5 million square feet of new retail space were added to tier-I cities in the first half of 2024. In the second half of 2024, however, we anticipate a rise in supply because a few investment-grade malls are scheduled to open in places like Bengaluru, Hyderabad, Mumbai, and so on. In the second half of 2024, these malls are expected to add 3–4 million square feet of new retail space.
| Cities leading absorption in Jan-Jun ’24 | Percentage |
| Bengaluru | 34% |
| Chennai | 13% |
| Delhi-NCR | 12% |
| Hyderabad | 12% |
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%).
Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE, said, “Retail absorption increased in the first half of the year on an annualized basis. The ongoing introduction of quality supply is expected to continue stimulating an uptick in overall space take-up in the coming quarters.
Going forward, ongoing infrastructure development and rising passenger traffic unlock a significant opportunity for nationwide transit retail expansion”.
Ram Chandnani, Managing Director, Advisory & Transactions Services, CBRE India, said, “Steady retail leasing activity was witnessed in Q2 2024 on a quarterly basis. However, the ongoing introduction of quality supply is expected to continue stimulating an uptick in overall space absorption in the coming quarters. A growing number of direct-to-consumer (D2C) brands are recognising the importance of establishing a physical presence to complement their online operations. Developers are closely monitoring these brands with robust online customer bases and exploring opportunities to integrate them into physical retail formats”.
Retail Outlook
Leasing activity to continue; sustained demand for quality malls hinges on supply
- 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.
Momentum in luxury retail is set to continue
- 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
D2C brands experience rapid growth
- 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.
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE: CBRE), a Fortune 500 and S&P 500 company headquartered in Dallas, is the world’s largest commercial real estate services and investment firm (based on 2023 revenue). The company has more than 130,000 employees (including Turner & Townsend employees) serving clients in more than 100 countries. CBRE serves a diverse range of clients with an integrated suite of services, including facilities, transaction and project management, property management, investment management, appraisal and valuation, property leasing, strategic consulting, property sales, mortgage services and development services.
CBRE was the first International Property Consultancy to set up an office in India in 1994. Since then, the operations have grown to include more than 11,000 professionals across 15 offices, with a presence in over 80 cities in India. As a leading international property consultancy, CBRE provides clients with a wide range of real estate solutions, including Strategic Consulting, Valuations/Appraisals, Capital Markets, Agency Services, and Project Management. The guiding principle at CBRE is to provide strategic solutions that make real estate holdings more productive and economically efficient for its clients across all service lines. Please visit our website at https://www.cbre.co.in/
