RETAIL LEASING REMAINS STRONG

At 6.4 mn sq-ft in CY 2024 despite limited supply infusion across top 8 cities.

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CBRE South Asia has announced the findings of its report - 'India Retail Figure H2 2024'. According to the report, expansionary sentiments amongst retailers continued to remain positive in CY 2024 as retail leasing touched ~6.4 mn. sq.ft. across the top 8 cities in India. A strong supply pipeline is expected in 2025, with a few investment-grade assets expected to commence operations in tier-I cities, including Bengaluru, Hyderabad, Delhi-NCR, and Mumbai. Retail supply in CY 2024 stood at 1.2 mn sq-ft.

In 2024, the fashion and apparel sector experienced robust demand, particularly within the mid-range, value fashion, and athleisure segments. This strong performance resulted in these categories representing 37% of the overall retail space take-up during the second half of the year. The homeware and department stores (~13%) and the food and beverage sector (~12%) were the other categories that drove leasing during H2 2024.

The direct-to-consumer (D2C) sector witnessed strong growth, contributing ~7% to the total leasing activity in 2024, with approximately 0.6 mn. sq. ft. of space take-up. Fashion and apparel, along with homeware and department stores, accounted for more than 70% of the leasing within the D2C segment.

Retail space take-up across tier-l cities stood at ~3.2 mn sq-ft during the second half of 2024 at par with the leasing recorded in the previous six-month period. Bengaluru led the space absorption, followed by Hyderabad and Delhi-NCR - these three cities cumulatively accounted for ~58% of the total retail space take-up in H2 2024. Continued growth in investment-grade mall supply and sustained secondary space absorption is expected to drive retail leasing activity in the coming quarters.

Due to adjustments in project timelines, with certain completions deferred to 2025, India saw the addition of approximately 0.7 mn sq-ft of Grade A mall space in the Jul-Dec'24.