edited by: Mohammad Haris
Last Update: February 15, 2023, 17:17 IST
Physical retail continues to gain prominence among Indian shoppers, despite the continued growth of online retail. (Photo: shutterstock)
International brands such as Tim Hortons, Victoria’s Secret and Uniqlo continued to expand during July-December 2022 despite global headwinds.
Physical retail continues to gain prominence among Indian shoppers, despite the continued growth of online retail. As a result, this has led to strong footfalls, especially during July-December 2022, to take up space by domestic and international retailers, according to a report by real estate consultant CBRE.
“Retail leasing activity increased by 5 per cent to 2.43 million sq ft in July-December 2022 as against 2.31 million sq ft in January-June 2022 period. Overall, in 2022, leasing activity in the retail sector is set to grow by 20 per cent year-on-year to 4.7 million sq ft,” CBRE said in a report titled ‘India Retail Figures H2 2022’.
It added that international brands such as Tim Hortons, Victoria’s Secret and Uniqlo continued to expand during July-December 2022 despite global headwinds. As tier-2 cities grew in popularity, Uniqlo opened its first store in Chandigarh, Tim Hortons entered Ludhiana, and Starbucks, Biba and Shoppers Stop opened in Dehradun.
“During the second half of 2022, American home furnishing shop chain Pottery Barn is set to rapidly open two stores in Delhi-NCR. adidas opens its largest experience store in Delhi-NCR, and Zara, Nike and Asort are among other companies that have launched experience/flagship stores with a wide range of technology and other services in the city,” CBRE said. said in the report.
It added that fashion and apparel retailers continued to expand their footprint, accounting for over 42 per cent share in total leasing in July-December 2022. Other key categories that saw continued leasing activity during July-December 2022 included Food & Beverages. (12 per cent), with hypermarket (7 per cent) categories.
The entertainment category, which was hit the most during the pandemic, emerged as one of the top demand drivers with a 6 per cent share in the total space take-up during July-December 2022.
CBRE President and CEO (India, South-East Asia, Middle East and Africa) told Anshuman Magazine, “The Indian retail sector is improving, and we expect it to continue to gain momentum through 2023. Tough global conditions, international brands are not only expanding in Tier-I cities but also entering Tier-II and III cities as they see India as a potential market.
Ram Chandnani, Managing Director (Advisory and Transaction Services), CBRE India, said, “As cities began to reopen after the pandemic, many buyers returned to physical retail and have since adopted ‘hybrid commerce’. Sales in July-December 2022 surpassed pre-pandemic levels due to a rise in consumer confidence, leading to an increase in spending. The pace of leasing is expected to pick up further in January-June 2023, as newly completed malls are expected to take up space.”
Bangalore and Delhi-NCR, followed by Chennai and Mumbai, led the leasing activity, accounting for nearly 80 per cent of the total space acquisition during the July-December 2022 period.
Rental values increased on a half-yearly basis in most cities due to strong retail demand in some micro-markets. Among the high streets, rents increased by around 4-8 per cent in select locations in Delhi-NCR, Bengaluru, 4-12 per cent in Ahmedabad and around 1-3 per cent in Mumbai. Meanwhile, major mall clusters in Delhi-NCR and Bengaluru saw rental growth of 3-15 per cent and 2-6 per cent, respectively.
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