Retail Leasing Grows 21% YoY To 4.7 Mn Sqft In 2022; Bengaluru, NCR Lead Absorption: CBRE


Edited By: Mohammad Haris

Last Updated: January 22, 2023, 09:57 IST

On a pan-India basis, Bengaluru recorded the highest share of mall completions, with a share of 79 per cent in Q4 2022, followed by Pune (21 per cent).

On a quarterly basis, retail leasing stood at 1.6 mn sqft with a growth of 79% in the October-December quarter over the July-September quarter

Real Estate: Retail leasing in India grew 21 per cent y-o-y in 2022 to 4.7 million square feet in 2022 and the supply in 2022 stood at 1.4 mn sqft. Overall, Bengaluru and Delhi-NCR had a major share (61 per cent) in leasing activity in 2022, while Chennai, Hyderabad and Pune had a 9 per cent share each, according to a report by CBRE.

“Supply addition in Bengaluru was the highest, with a share of 86 per cent, followed by Pune (14 per cent) in 2022. Key sectors that drove leasing activity in 2022 were fashion & apparel, food & beverage (F&B), hypermarkets, and homeware & department stores,” CBRE South Asia said in the report, titled ‘India Market Monitor 2022’.

CBRE added that on a quarterly basis, retail leasing stood at 1.6 mn sqft with a growth of 79 per cent in the October-December quarter over the July-September quarter, while the supply in the October-December quarter stood at 1 mn sqft.

“During the October-December 2022 quarter, the report highlights that Bangalore (41 per cent), Delhi-NCR (27 per cent), Chennai (9 per cent), and Hyderabad (7 per cent) led the absorption. On a pan-India basis, Bengaluru recorded the highest share of mall completions, with a share of 79 per cent in Q4 2022, followed by Pune (21 per cent),” according to the report.

It also said key sectors that drove the leasing activity in Q4 were fashion & apparel (37 per cent), homeware & department stores (12 per cent), hypermarkets (10 per cent), F&B (10 per cent), and luxury (7 per cent). The report highlighted quarterly rental growth (mall) in select pockets of Delhi-NCR (Noida 12-16 per cent, Vasant Kunj 8-12 per cent, Saket District Centre 8-12 per cent) and Bengaluru (East 3-8 per cent). A 5-9 per cent rental growth in the high streets of Kammanahalli/ HRBR Layout in Bengaluru and Sector 29, Gurgaon was also recorded.

Anshuman Magazine, chairman and CEO (India, South-East Asia, Middle East & Africa) of CBRE, said, “The Indian economy is likely to remain steady despite tightening monetary conditions and recessionary global headwinds. Even though a challenging scenario across developed economies, retail leasing activity scaled a new high in 2022. Given the robust supply pipeline planned for 2023 and strong domestic consumption, leasing activity is anticipated to remain steady. We also expect more international brands, especially in the F&B space, to enter the country.”

Ram Chandnani, managing director (advisory & transactions services) of CBRE India, said, “Going forward, we expect retail leasing to gain traction in Tier II, III, and even IV cities as retailers and landlords are looking to leverage the purchasing power of these towns and cities. Activity in these cities will remain strong from domestic retailers, with international retailers expected to be more active in the apparel and QSR segments.”

According to the CBRE report, leasing is likely to strengthen further going forward, given the strong supply pipeline and strong domestic demand, although global headwinds might cause a short-term anomaly. Entry of more international brands, especially in the F&B space, is also likely while expansionary demand from domestic brands might continue.

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