04 May 2023, Mumbai
The retail sector in India has witnessed significant growth in the first quarter of 2023, with retail space leasing more than doubling to 1.5 million square feet, according to a recent report by real estate consulting firm CBRE.
The report highlights a remarkable YoY increase of 474% in retail supply during the same period, indicating robust growth in the sector.
The fashion and apparel industry leads the leasing activity, accounting for the largest share at 31%, followed by homeware and department stores at 19%, F&B at 11%, luxury at 8%, and consumer electronics at 5%.
The report suggests that Ahmedabad leads the absorption, accounting for a 27% share, followed by Delhi-NCR at 26%, and Bangalore and Chennai at 14% each. These three cities together make up 81% of total leasing.
In terms of supply, Ahmedabad dominates the sector with a 73% share during the first quarter of the year, followed by Delhi-NCR at 20%.
The report predicts that the retail supply in 2023 will exceed the 2022 levels, driven by pent-up supply addition and investment-grade projects launched in the past two years. This expected increase in supply is likely to boost primary leasing, which will be the primary demand driver for retail space in 2023.
The report further suggests that retailers will diversify their location plans beyond traditional malls and high streets to cater to consumer demands and modify supply chains.
