Fashion and entertainment categories lead as global brands expand across India
CBRE South Asia, India’s top real estate consulting firm, has unveiled its ‘India Retail Figures H1 2024’ report, showcasing remarkable growth in the retail sector. The first half of 2024 experienced the highest leasing activity in five years, reaching 3.1 million square feet across eight major cities. This marks a 7 per cent year-on-year increase from the 2.9 million square feet recorded in the same period in 2023.
Bengaluru, Chennai and Delhi-NCR emerged as the top performers, collectively accounting for 59 per cent of the total absorption. Bengaluru led with 1 million square feet, followed by Chennai and Delhi-NCR. The report also highlights the robust demand in fashion and apparel, as well as the entertainment sector, which dominated 52 per cent of the leasing activity.
Significant expansions by international brands contributed to this growth. Notable entrants include Charles Tyrwhitt, Maison Margiela and Franck Provost, who opened their first Indian stores in Ahmedabad, Mumbai and Bengaluru, respectively. Additionally, brands like Breitling, Michael Kors, Daiso Japan and ILEM Japan expanded their presence in key cities.
Anshuman Magazine, Chairman and CEO – India, South-East Asia, Middle East and Africa, CBRE stated, “Retail absorption increased in the first half of the year on an annualised basis. The ongoing introduction of quality supply is expected to continue stimulating an uptick in overall space take-up in the coming quarters. Ongoing infrastructure development and rising passenger traffic unlock a significant opportunity for nationwide transit retail expansion.”
Ram Chandnani, Managing Director of Advisory and Transactions Services, CBRE India added, “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.”
The report further notes that tier-II cities, including Chandigarh, Jaipur, Lucknow, Indore and Kochi, saw a collective space take-up of 0.4 million square feet. Indore and Kochi led this absorption, accounting for 56 per cent, while Lucknow and Chandigarh each contributed 17 per cent.
During the April-June 2024 quarter, retail leasing stood at 1.2 million square feet. Hyderabad, Chennai, and Delhi-NCR contributed 54 per cent of this activity. The quarter’s leasing was primarily driven by fashion and apparel (38 per cent), followed by homeware and department stores (16 per cent), entertainment (15 per cent), food and beverage (9 per cent) and consumer electronics (6 per cent).
The retail outlook remains positive, with strategic locations expected to see steady leasing activity. The demand for quality malls will hinge on the availability of new supply, particularly as vacancy levels in key malls remain low. The report also highlights the growing momentum in luxury retail, driven by evolving lifestyles and the influx of global brands.
The D2C sector is experiencing rapid growth, driven by increased ecommerce and internet penetration. These brands are now focusing on establishing a physical presence to complement their online operations, providing customers with a seamless multi-channel shopping experience.
Lastly, transit retail is poised for substantial growth, fuelled by ongoing infrastructure development and rising passenger traffic. India’s ambitious plan to expand its airport infrastructure to 300 airports by 2047 underscores the potential for significant retail growth at transit hubs across the country.
