Leasing of retail space more than doubled to 1.5 million square feet in Q4: CBRE

New Delhi: Leasing of retail real estate spaces more than doubled to 1.5 million square feet in January-March across eight cities as retailers look to expand amid revival in consumption, according to CBRE India.

Real estate consultant CBRE South Asia Pvt Ltd on Tuesday released 'India Market Monitor – Q1 2023' stating that retail sector leasing grew by 130 per cent year-on-year to 1.5 million square feet in January-March 2023.

Ahmedabad led the absorption with a 27 per cent share, followed by Delhi-NCR at 26 per cent, and Bengaluru and Chennai at 14 per cent 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 & 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 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.

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 per cent, followed by homeware and department stores at 19 per cent, F&B (food and beverages) at 11 per cent, luxury at 8 per cent, and consumer electronics at 5 per cent.

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 witness greater traction.