Retail Leasing Trends in India: Q1 2024 Insights

    Date:

    Share post:

    In the first quarter of 2024, India’s retail sector experienced robust leasing activity, with approximately 1.1 million square feet of retail space leased across organized retail centers and prominent high streets. According to a report by JLL, Mumbai, Delhi NCR, and Bengaluru collectively dominated the market, accounting for nearly 70% of the total leasing activity.

    Key Sectors in Retail Leasing

    Fashion and Apparel: Mid-Segment Brands Lead

    The fashion and apparel sector emerged as the dominant player in retail leasing, contributing 40% to the overall volume. Mid-segment brands claimed the largest share at 40%, followed closely by value segment brands at 38%.

    Food and Beverage: Emphasis on Experiential Dining

    The food and beverage segment accounted for 21% of the leasing activity, with experiential dining brands capturing a significant 38% share within this segment.

    Diverse Tenant Mix

    Apart from fashion and F&B, leasing activities encompassed jewelry, lifestyle products, automobiles, and banking services, showcasing a diverse tenant mix in India’s retail markets.

    Focus on Top 7 Cities

    The leasing trends were particularly concentrated in India’s top 7 cities: Delhi NCR, Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, and Pune, underscoring their pivotal role in driving retail development across the country.

    Emerging Retail Dynamics

    Shift towards Lease-Based Developments

    Looking ahead, approximately 78% of the upcoming retail supply, totaling about 45 million square feet, is expected to be lease-based. This approach allows developers greater control over tenant mix and property management, thereby enhancing the quality of retail offerings and rental potential.

    Expansion into New Micro-Markets

    The surge in retail developments has prompted retailers to explore new micro-markets, bringing them closer to emerging consumer bases and underscoring the urbanization trends in India.

    International and Domestic Retail Landscape

    Dominance of Domestic Brands

    Domestic brands led the retail leasing activity in Q1 2024, securing a substantial 76% share of the market.

    International Entrants

    Seven international brands debuted in India during the quarter, with Delhi NCR and Mumbai emerging as preferred launch locations, particularly within the beauty and cosmetics category.

    Future Outlook and Market Dynamics

    Demand for Prime Retail Spaces

    Prime retail spaces with high footfall continue to be in strong demand nationwide, appealing to both international and national retailers seeking well-curated tenant mixes and superior infrastructure.

    Addressing Market Challenges

    While vacancy rates remain low (around 6%) in top-quality retail centers, average retail developments face higher vacancy rates (approximately 20%). Efforts are underway to revitalize underperforming retail spaces through repurposing or transformation to meet evolving market demands.

    Related Posts

    Latest posts

    Indian Real Estate Deals Saw ‘Eight-fold Increase’ In April-June 2024

    In a remarkable upswing, the Indian real estate market recorded deals rose massively, reaching worth $1.56 billion, during...

    Luxury Housing Sales Continue To Soar: CBRE

    Sales in luxury housing market in India surged nearly 27 percent compared to the same period last year,...

    ASK Property Fund Invests Rs 190 Crore In Kalpataru’s Mumbai Project

    ASK Property Fund, the private equity arm of Blackstone-backed ASK Asset & Wealth Management Group, has invested Rs...

    COWRKS Expands Footprints In India With New Centres In Mumbai, Bengaluru

    COWRKS, a leading provider of premium workspaces announced its expansion with the opening of new centres in Mumbai...