Bengaluru recorded a 39% growth in leasing across its high streets and malls during the January-June period of 2024, according to a report released by property consultancy CBRE on July 30.
Total retail leasing in the IT capital during the first half of the ongoing calendar stood at 1 million square feet, up from 0.8 million square feet in the corresponding period last year.
The segment-wise break up in the report showed that fashion and apparel led with a 40% share, followed by food and beverage at 15%, and homeware and department stores with a 12% share.
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On a pan India basis, retail leasing soared to a 5-year high in January- June 2024, recording 3.1 mn sq ft across the top eight cities, the report said. On an annual basis, the segment registered a 7% year-on-year growth from the 2.9 mn sq ft recorded in the first half of 2023. Bengaluru led this rally with a 34% share in the overall pie, followed by Chennai at 13% and Delhi-NCR and Hyderabad with a 12% share each.
โThe ongoing introduction of quality supply is expected to continue stimulating an uptick in overall space take-up in the coming quarters,โ said Anshuman Magazine, Chairman and CEO – India, South-East Asia, Middle East and Africa, CBRE.
The first half of 2024 also witnessed the entry of new international brands in India such as Charles Tyrwhitt, Maison Margiela, Time Vallรฉe and Franck Provost, per the report.
Positive outlook for H2 2024
About 0.5 million square feet of space was added across Tier I cities during the 6 month period under review. โWe expect an increase in supply in the second half of 2024 as a few investment-grade malls are set to begin operations in cities such as Bengaluru, Hyderabad, Mumbai, etc. These malls are projected to add 3 โ 4 million sq ft of new retail space in the second half of 2024,โ the report noted.
Tier II cities on the other hand recorded overall space take up of 0.4 million square feet during the first two quarters, with absorption led by Indore and Kochi, which jointly accounted for an approximately 56% share.
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The report emphasised that leasing in strategic locations is expected to remain steady, with a healthy mix of primary and secondary leasing projected to continue at a consistent pace. It however pointed out that since vacancy levels in most key malls across most Tier I cities remain negligible, the entry of investment grade supply will dictate primary leasing trends.
Incidentally, the direct-to-consumer sector is experiencing robust growth, driven by increased e-commerce and internet penetration, improved last-mile logistics, and a rising consumer base of millennials and Gen Z, the report said.
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However, while airports are witnessing considerable development, much of the retail potential at other transit hubs such as metros, railways, highways and bus stations remains untapped, the report pointed out.
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