Retail spaces in shopping malls and high-street areas might see a fall in their demand in the current calendar year. Data from real estate consultant, CBRE, revealed that the demand for retail areas in malls and such locations could slip up to 15 per cent in the 2024 calendar year.
Leasing of retail spaces climbed 48 per cent to a record 71 lakh square feet in 2023 across eight major cities, up from 48 lakh square feet in 2022, the data revealed, reported PTI.
The real estate consultant in its ‘2024 India Market Outlook’ estimated that leasing of retail space will remain between 60-65 lakh square feet in 2024. The report said that supply of retail spaces is expected to remain stable amidst the completion of several high-quality mall projects. Further, about 50-60 lakh square feet of investment-grade mall area should become operational tier-I cities, the study noted.
Commenting on the data, Anshuman Magazine, Chairman and CEO - India, South-East Asia, Middle East & Africa, CBRE, said, “Driven by robust consumer demand, India's retail sector saw remarkable growth in 2023. Looking ahead to 2024, both retailers and consumers are cautiously optimistic. While tier-I cities remain key expansion hubs, promising tier-II markets are attracting new players. Malls are transforming into experiential centres, offering a mix of entertainment, dining, and shopping. Fuelled by pent-up demand and strategic expansion, India's luxury retail is experiencing a leasing boom, attracting both established brands deepening their presence and new international players entering the market. This expansion reaches beyond Delhi and Mumbai to the newer markets like Hyderabad and Ahmedabad.”
The report noted that the home decor category in the retail segment is project to increase further in online and offline formats in 2024. At the same time, fashion and apparel firms are estimated to continue expanding their reach in tier-I cities across malls and high streets, along with domestic jewellery brands.
The report stated that retailers might express more caution with expansion as they will focus on locations with better visibility, robust foot traffic, and helpful consumer demographics. This is expected to rationalise rental growth across primary and secondary markets.
Ram Chandnani, MD, Advisory and Transactions Services, CBRE India, noted, “Foreign luxury retailers are entering India through partnerships with local players. The upcoming launches of a few brands underline this trend. This reflects a renewed optimism in India's retail sector, with investments from major developers in tier-I cities, while institutional investors target tier-II cities, creating a dynamic retail landscape.”
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