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Showing no signs of tail-off, the rental leasing activity stood at 2.43 million sq. ft. in H2 2022 and witnessed a jump of 5% on a half-yearly basis, as depicted by the CBRE South Asia’s new report, called India Retail Figures H2 2022. The report highlights the periodic augmentation in retail space leasings in commercial projects, high-street structures, and mixed-use establishments, with Delhi-NCR and Bangalore leading the pack. The diverse nature and quality of commercial real estate projects have outpaced the nondescript buildings and brick-and-mortar structures of earlier times.
Retail space leases gets momentum
As per the report, Delhi-NCR and Bangalore have amassed more than 60% of the annual and half-yearly leasing activity. The annual retail leasing saw a seismic growth of 21% Y-o-Y and touched 4.7 million sq. ft. in 2022.
Abhishek Bansal, Executive Director, Pacific Group says, “The sheer fact that the rental store uptake has shot up for good reasons despite the rise in retail rental prices demonstrates its strong demand in the markets. The pandemic fears have entirely submerged, and people have started thronging to malls and commercial spaces to shop, buy new things and products, eat, engage, and refresh themselves. New brand store launches act as fresh, attractive additions for malls and commercial projects and help to increase footfalls and create a new level of engagement in the mall.”
Notwithstanding the growing presence and prominence of online retail stores and sites, the phenomenon did not have a subsidiary impact on the offline store setups and leasings as it reigns supreme in the post-pandemic era. The fashion and apparel brands are in an expansionary mindset mode and took the lion’s share of over 42% in overall leasing in July-December 2022, according to the India Retail Figures H2 2022 study.
Sumit Agarwal, Director Sales & Leasing, Bhutani Grandthum says, “Urban cities and towns have seen a rapid increase in population with a good income equity, which inevitably creates a satiable desire for commercial and retail projects in the vicinity. The national and international brands are locking deals and taking up spaces in newly launched commercial projects as they want to tap into the untapped demographics and turn them into lifelong consumers. There has also been a subsequent uptick in the availability of stylised retail and commercial spaces. It has supported and contributed to the consistent peak in the retail space leasing activity.”
The report enumerates that rental space prices have increased by 4-8% in specific locations of Delhi-NCR and Bangalore. Irrespective of this fact, there is a record-breaking rise in retail space bookings by F&B brands, hypermarkets, and entertainment-centric brands in commercial real estate circuits. The study has also thrown light on the insurgence of international brands’ share in India’s retail space leasing activity, reflecting the evolution of consumer taste and liking in India.
Ravinder Choudhary, Assistant Vice President, Vegas Mall says, “We had expected a progressive rise in the retail space leasing, channelised by the momentum gained by the commercial real estate sector two years ago. The retail space leasing records a spectacular comeback post-Covid-19. It has seen a constant upward graph and refuses to slump. The malls are places of art, culture, and entertainment, and this belief has seen a major restoration in current times. People have flocked to malls and commercial spaces for entertainment, shopping, and enjoying a holistic retail experience, comprising national and multi-national brands.”
Pankaj Kumar Jain Director KW Group says, “We have seen a consistent hike in retail rental leasing deals in our commercial projects, KW Delhi 6 and KW Blue Pearl, which are located in Raj Nagar Extension and Karol Bagh, respectively. The positive demand in retail space leasing has brought significant traction to commercial real estate post-pandemic and will only increase by greater margins in the upcoming quarters. The advent of new investors, luxury, and international brands and further expansion of existing brands to new locations in Delhi-NCR are signs of a blooming period ahead. The urban demography statistics and the overall buoyant demand will continue to attract new players in the industry.”
Ajendra Singh, VP, Sales & Marketing, Spectrum Metro says, “The immense growth in infrastructural quality and proliferation of commercial-retail structures in different corridors has led to a significant increase in leasing opportunities for retail brands. The urban population and millennials are developing a refined taste for multi-ranged brands. The retail leases have contributed majorly to the resurgence of the commercial real estate sector post-Covid and will see an enhanced demand in the years to come, both in the case of home-grown and multi-national companies, typically food, cosmetics, beauty, and healthcare brands.”
The report also states that over 60% of international retail brands have expanded their regional presence and established stores in metro cities as well as Tier 1 and Tier 2 cities to cater to new customer verticals in the bid for territorial market expansion and the creation of value-based engagement.