Retail leasing grows 24% to 2.87 million square feet in January-June 2023, supply jumps 148% : Report

Led by Bengaluru, Delhi-NCR and Ahmedabad, which accounted for 65 per cent of new leasing, retail space renting has jumped 24 per cent while supplies soared 148 per cent in the first half of 2023, according to a report.

Retail space supplies jumped massively as mall completions rose 8 per cent on a half-yearly basis during the first six months of the year, according to the data compiled by real estate consulting firm CBRE South Asia.

As per the data of eight markets, Bengaluru topped the list leasing out 0.8 million square feet in the reporting period, followed by Delhi-NCR (0.7 mn sq ft), Chennai and Ahmedabad (0.4 mn sq ft each), Mumbai and Hyderabad (0.2 mn sq ft each), Kolkata (0.06 mn sq ft) and Pune (0.12 mn sq ft).

According to the report, retail leasing rose 24 per cent on-year during January-June 2023 compared to 15 per cent growth in the year-ago period. Total leasing during the period stood at 2.87 mn sq ft compared to 2.31 mn sq ft, led by Bengaluru, Delhi-NCR and Ahmedabad which collectively accounted for 65 per cent share.

The period also saw a record 148 per cent on-year increase in supplies at 1.09 mn sq ft compared to 0.44 mn sq ft, it said.

Further, boosted by the increased appetite of shoppers, these eight cities saw an 8 per cent growth in mall completions with Ahmedabad recording the maximum share of 73 per cent, followed by Delhi-NCR with 20 per cent share.

The combined share of Bengaluru and Delhi-NCR in retail space leasing stood at 59 per cent. During this period, Bengaluru emerged as the frontrunner in leasing, capturing a significant 35 per cent share in overall leasing, followed by Delhi-NCR with a 24 per cent share, Chennai with 14 per cent share and Hyderabad at 11 per cent.

The leasing activity was primarily driven by fashion and apparel with 38 per cent; food & beverage at 18 per cent, luxury and home & department store sectors at 11 per cent, and consumer electronics sector accounted for 7 per cent of the leasing activity during this period.

The leasing activity was led by domestic firms (75 per cent), followed by retailers from Asia-Pacific (12 per cent), Europe, the Middle East and Africa (10 per cent ) and America (3 per cent).

According to Anshuman Magazine, chairman of the agency, retail leasing growth showcases a promising outlook for coming quarters and he anticipates secondary leasing to drive the momentum though primary leasing will not be lagging far behind on the back of a robust supply pipeline and the approaching festive season.