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Retail leasing in the sector is expected to sustain at 6-6.5 million square feet in 2024, says CBRE.- By the year-end, 5-6 mn. sq. ft. of investment-grade mall space will become operational in
tier-I cities . - Domestic brands are expected to turn cautious, but
global brands are continuing to expand, according to the report.
The saturation follows the remarkable growth in 2023, as brands absorbed a little over 7 million sq ft. The supply environment in terms of retail space like malls and high streets is also expected to be stable in the current year. By the year-end, 5-6 mn. sq. ft. of investment-grade mall space will become operational in tier-I cities.
“Retailers, including anchor tenants and established brands, are expected to proceed cautiously with expansion plans. They will prioritize locations with high visibility, strong foot traffic and favourable consumer demographics. As a result, rental growth is expected to rationalize across both primary and secondary locations,” the report says.
But, there is a silver lining! Luxury and premium brands, especially global brands, are choosing to spread their wings in top cities despite the global macroeconomic and sectoral challenges.
“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,” said Ram Chandnani, managing director, advisory & transactions Services, CBRE India.
Retail demand across investment-grade malls, prominent high streets and standalone developments has grown consistently since 2020. Tier-I cities remain key expansion hubs, and promising tier-II markets are attracting new players. Malls are transforming into experiential centres, offering a mix of entertainment, dining and shopping.
“Fuelled pent-up demand and strategic expansion, India’s luxury retail sector 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,” said Anshuman Magazine, chairman & CEO of India, South-East Asia, Middle East & Africa, CBRE.
In 2024, the home décor segment is likely to expand in both online and offline formats, while fashion and apparel players will continue expanding in tier-I cities across malls and high streets, the report adds. It also sees good traction from domestic jewellery brands as well as the entertainment category.