Demand for Quality Retail Space across Prime Malls & High Streets Witnessed an Uptick in Mumbai

CBRE South Asia Pvt. Ltd, India’s real estate consulting firm, has announced the findings of its latest retail report, ‘CBRE India Retail Figures H1 2022’. According to the report, backed by strong footfalls, demand for quality retail space across prime malls and high streets witnessed an uptick in Mumbai

Among the key retail categories, leasing was mainly driven by Homeware & Department stores with a share of 55 percent in total leasing, followed by Food & Beverages (F&B) (18 percent) and Fashion & Apparel (11 percent).

Key transactions recorded during H1 2022 in the city were:

• IKEA leased 72,000 sq. ft. in R City Mall
• Copper Chimney leased 4,800 sq. ft. in Infiniti mall
• Levi’s leased 3,800 sq. ft. in Oberoi Mall

Homeware and department store brands, F&B players, and fashion & apparel retailers with a strong customer base, brand recognition, and an ability to create their own retail ecosystem opened stores in secondary and peripheral locations.

The report indicates that the retail sector leasing in India increased by about 166 percent Y-o-Y crossing 1.5 million sq. ft. As of H1 2022, the total investment grade mall stock crossed over 77 million sq. ft. 

The report points out that among the cities, Delhi-NCR and Pune, followed by Bangalore and Hyderabad, led the leasing activity, together accounting for more than 70 percent of the overall retail space take-up. As per the report, pent-up supply is likely to enter the market during H2 2022, and the total supply for the year is anticipated to surpass the pre-pandemic levels. Leasing momentum is expected to pick up in H2 2022 owing to the anticipated space take-up in newly completed malls.

The report also observed that due to strong demand from retailers across investment grade malls and prominent high streets, rental values increased on a half-yearly basis in select micro-markets across most cities. Among high streets, rents rose by about 5-12 percent across select locations in Delhi-NCR, Bangalore, Hyderabad, and Pune, and about 1-3 percent in Mumbai. While prominent mall clusters in Pune and Delhi-NCR witnessed rental growth of 5-11 percent on a half-yearly basis, a marginal increase of 1-3 percent was reported across one mall cluster in Mumbai.

Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE said, “It is evident that retailers have regained confidence and are set for expansion mode. We anticipate that going forward, domestic brands will remain proactive in relocations/expansions, and a strong appetite from international retailers will continue. We foresee retail leasing to touch 6-6.5 million sq. ft. in 2022, twice the 2021 quantum. Additionally, owing to the tremendous growth potential, we expect many international brands to launch stores in tier II and III markets.”

Ram Chandnani, Managing Director, Advisory & Transactions Services, CBRE India added, “We expect nearly 5.5 - 6.0 million sq. ft. of new investment-grade malls to become operational during the year, an annual growth of nearly 40 percent. Accounting for nearly an 85 percent share in the overall investment-grade mall completions, Hyderabad, Delhi-NCR, and Bangalore are expected to dominate retail supply addition in H2. Moreover, Mumbai and Chennai are also anticipated to witness supply addition. Among the consumer segment, fashion and apparel retailers will continue to expand their physical sales networks and pay particular attention to enhancing flagship stores.”