The demand bounced back to 39 lakh square feet in 2021 and further improved to 47 lakh square feet in 2022 across the eight major cities
Leasing of retail space in malls and prominent high-street locations across eight major cities is expected to rise 17-28 per cent to 55-60 lakh square feet, driven by demand from retailers in fashion & apparel, homeware, and departmental stores categories, according to CBRE India.
Real estate consultant CBRE South Asia Pvt Ltd on Wednesday released its report, '2023 India Market Outlook' that highlights key trends and projections for realty sector. "Retail leasing is expected to touch 5.5–6 million (55-60 lakh) square feet in 2023, the highest level after the 2019 peak of 6.8 million (68 lakh) square feet. It is expected that primary leasing in newly completed malls will remain the key driver of retail space demand in 2023," the consultant said.
Figures denote leasing of space in investment-grade malls, prominent high streets and standalone developments. The eight cities tracked are Ahmedabad, Bengaluru, Chennai, Delhi-NCR, Hyderabad, Kolkata, Mumbai and Pune. After the 2019-peak, the leasing of retail space fell to 20 lakh square feet during the 2020 calendar year because of lockdowns to control the COVID pandemic.
The demand bounced back to 39 lakh square feet in 2021 and further improved to 47 lakh square feet in 2022 across the eight major cities. Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE, said India's strong domestic consumption would continue to strengthen the retail sector. Leasing activities and new supply in retail real estate would grow.
"We believe that any impact of an expected slowdown on economic activity will be circumvented by strong macroeconomic fundamentals and domestic consumption," he said. On the revival of retail sector, Gagan Randev, Executive Director, India Sotheby's International Realty, said, "In the last couple of years, the retail industry has shown a remarkable recovery, coinciding with the entry of many global brands into India."
The pace of entry of some of these has been nothing short of remarkable, he said. "This has been a big positive development for the retail sector, and it appears that the trend will continue and rentals will continue to rise. In 2023-24, India is expected to see 16 new malls opening in Tier 1 and 2 cities, and it is our expectation that e-commerce and physical shopping will coexist," Randev said.
CBRE estimated that the new supply of retail real estate space would be around 60 lakh square feet in 2023, the highest in the past five years. It noted that the supply scenario would improve due to huge pent-up supply lined up for completion during 2023. Several investment-grade projects launched by reputed players in the past 1.5-2 years are also expected to become operational in 2023.