Retail leasing in Delhi-NCR rose by 65 per cent in the first six months of 2023 to 700,000 square feet (sq ft) as compared to 420,000 sq ft in the same period last year, according to a report by real estate property consultancy CBRE South Asia.
According to "India Retail figures H1 2023", the main deal that led the demand was the acquisition of 10,000 sq ft of space by clothing brand Twamev in South Extension II. It was followed by Apple's 8,800 sq ft store in Select City Walk Mall, Saket and coffee and sandwich chain Pret A Manger's 1,160 sq ft deal in the same mall.
During this period, fashion and apparel players drove leasing with a share of about 47 per cent, followed by luxury at 13 per cent, and food and beverage with an 8 per cent share.
On a pan-India level, retail leasing witnessed a 24 per cent year-on-year (YoY) growth in the January-June period. The demand was 15 per cent higher compared to July-December. Total leasing during the period stood at 2.90 million sq ft compared to 2.31 million sq ft YoY.
"Bangalore, Delhi-NCR, and Ahmedabad collectively accounted for a cumulative share of 65 per cent in leasing activity during the first six months this year," CBRE said.
Further, owing to an increased appetite of shoppers, the top eight cities in India saw an 8 per cent growth in mall completions on a half-yearly basis.
CBRE also highlighted the entry of several international brands in the country in the last six months.
Apple launched its first two new stores in Mumbai and Delhi-NCR. UK-based coffee and sandwich chain Pret A Manger also opened stores in Mumbai and Delhi-NCR. Canadian coffee brand Tim Hortons, which debuted in India last year strengthened its presence in Delhi-NCR and Punjab and entered the Mumbai market this year.
"European luxury brand Balenciaga is set to open its first brick-and-mortar store in Delhi-NCR through its partnership with Reliance Brands. Additionally, Galeries Lafayette, a leading shopping centre based in Paris, is also set to establish its presence in India by opening two stores in Mumbai and Delhi-NCR in collaboration with Aditya Birla Fashion and Retail Ltd," it said.
"Retailers have expressed positive leasing sentiments, indicating their strong interest in establishing new setups, expanding operations, and upgrading existing stores...Going forward, the anticipated growth in mall supply coupled with encouraging consumer spending trends, especially during the festive season, is expected to further augment the sentiment for expansion among both international and domestic retailers who are well positioned in the market," said Anshuman Magazine, chairman and chief executive officer (CEO) for India, South-East Asia, Middle East & Africa.
At the end of 2023, retail leasing is expected to touch 5.5–6 million sq ft, the highest level after the 2019 peak of 6.8 million sq ft.
"It is expected that primary leasing in newly completed malls would remain the key driver of retail space demand in 2023. Led by strong demand for quality retail space, rental values increased on a half-yearly basis in select micro-markets across most cities. Additionally, tier-II cities are expected to gain greater traction as retailers recognize the potential of these markets," said Ram Chandnani, managing director of Advisory and Transactions Services at CBRE India.