Retail leasing up by 15% in megapolis in first half of 2023: CBRE Report

Increased leasing by homeware and department stores, consumer electronics and fashion & apparel retailers have pushed up retail leasing in the megapolis by close to 15 per cent in the first half of the year, says an industry report.

Retail leasing across investment-grade malls, high streets and standalone developments during January-June 2023 rose 14.6 per cent in Mumbai, taking the total leasing to 0.21 million sqft, compared to 0.18 million sqft in the corresponding period last year, realty consultancy CBRE said in a note.

Key sectors that drove absorption include homeware & department stores which snapped up 20 per cent of the total fresh leasing, followed by consumer electronics and fashion & apparel (17 per cent each) during the period under review, it said, adding the leasing demand was driven by secondary leasing in high streets and mall clusters.

Some of the top leasing deals include a consumer electronics player leasing 20,800 sqft in Jio World Drive in BKC, Pantaloons leasing 13,500 sqft in Kasturi Regius, Croma leasing 10,800 sqft in Vishvaroop IT Park.

On a pan-India basis, retail leasing grew 24 per cent on year, and much more than the 15 per cent increase seen in the second half of 2022. Total leasing during the first half of 2023 rose to 2.9 million sqft from 2.31 million sqft.

Bengaluru, Delhi-NCR, and Ahmedabad collectively accounted for 65 per cent of new leasing during the first six months this year.

The period also saw a massive 148 per cent on-year increase in the supply of retail space, taking the total supply to 1.09 million sqft, up from 0.44 million sqft a year ago.

The top eight cities saw an 8 per cent growth in mall completions on a half-yearly basis led by Ahmedabad with a 73 per cent share, followed by Delhi-NCR at 20 per cent.

According to Anshuman Magazine, chairman & chief executive of CBRE India, the anticipated growth in mall supply coupled with encouraging consumer spending trends, especially during the festive season, is expected to further augment the sentiment for expansion among both international and domestic retailers who are well positioned in the market.

Ram Chandnani, managing director of the agency, said that retail leasing is expected to touch 5.56 million sqft in 2023, the highest after the 2019 peak of 6.8 million sqft. Led by strong demand for quality retail space, rental values increased on a half-yearly basis in select micro-markets across most cities.