The share of homeware and department stores, entertainment and superstores have increased in overall leasing while the share of fashion and apparel fell significantly to 28% from 41% in the previous quarte
Retailers leased one million square feet of new space across malls and high streets of major cities in April-June quarter as 2022 is expected to see the highest leasing since 2018, according to international property consultant CBRE’s market monitor report for the quarter. With the growth of nearly 363% year-on-year and about 118% quarter-on-quarter, retail leasing is expected to double in the second half of 2022 as many international brands have announced entry into India.
The share of homeware and department stores, entertainment and superstores have increased in overall leasing while the share of fashion and apparel fell significantly to 28% from 41% in the previous quarter. “The retail sector made a robust recovery in the second quarter of 2022, with transaction activity growing by more than 100% on a quarter-on-quarter basis,” said Anshuman Magazine, CEO, India, south-east Asia, Middle East & Africa, CBRE.
“Overall, in the first half of 2022, it reported massive growth of more than 160% on a year-on-year basis. Across cities, we are witnessing brands resizing and recalibrating their physical store strategies to diversify their portfolio and expand their footprint, with ‘experience’ fast becoming an important frontier to bridge the retailer-consumer gap.” He said the first half of the year also saw more than 500% increase in project completions compared to a year ago.
Delhi-National Capital Region led absorption with a 25% share, followed by Hyderabad (20%), Bengaluru (17%) and Chennai (13%).
According to CBRE, despite an uptick in online shopping, bricks-and-mortar retail is here to stay and retailers are likely to continue to focus on the three R’s – resizing, rightsizing and relocating – in order to ensure long-term growth and broaden their customer base. “We expect these positive sentiments to sustain in the near term even as retailers explore innovative means to attract their consumers and drive sales via a mix of both physical and online stores,” said Magazine.
As per the report, supply addition in the first half of the year touched 0.81 million sq ft, up about 523% year-on-year. Fashion and apparel players drove the leasing activity with a 28% share, followed by homeware and department stores and entertainment centres (14% each).
Technology is set to become a key enabler, as virtual fitting rooms, fit scanners, smart mirrors, iBeacon and visualisation tools are likely to provide a seamless experience to the consumers.
Experts said this growth was a result of pentup demand causing a renewal in physical retail visits even as online shopping continued to perform strongly.
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