Retail Leasing Doubles in Q2, Hits 3.3 Mn Sq Ft In First Half Of 2024: JLL

The leasing activity by retailers in organised retail centres and key high streets across the top seven cities surged during the second quarter (Q2) of calendar year 2024, according to JLL. Despite facing a slowdown in consumption growth in certain discretionary retail categories, retailers responded by closing unviable stores and expanding strategically. This positive momentum was evident in Q2 2024, with brands continuing to expand in newer micro markets and launching new formats, especially in the value fashion segment. Additionally, there was noticeable growth in premium, super-premium, and bridge-to-luxury segments.

Leasing activity rose to 2.2 million square feet, exhibiting a remarkable ~100 per cent increase compared to the previous quarter (Q1 2024). This robust performance in Q2 contributed to an impressive cumulative leasing transaction of 3.3 million square feet in H1 2024, marking a 20 per cent year-on-year increase.

The surge in leasing activity can also be attributed to retailers proactively securing leases in newly completed Grade A projects launched by established developers and institutional owners last year. Retailers also expanded in organised high streets and newer evolving catchments.

“The first half of 2024 saw domestic brands leading the retail market, accounting for an impressive 80 per cent of the gross leasing. Among international brands, Europe, Middle East, and Africa (EMEA) based retailers dominated, holding more than 50 per cent of the share, while the Americas accounted for 27 per cent and APAC for 21 per cent. India's appeal as a retail destination was further strengthened with the opening of nine international brands' maiden stores, primarily focusing on expansion in Delhi NCR and Mumbai,” said Dr. Samantak Das, Chief Economist and Head of Research & REIS, India, at JLL.

The expansion of leading fashion and apparel chains in the value and super value segments, along with the introduction of new formats and brands, contributed to the Fashion and Apparel segment capturing the highest share (38 per cent) in leasing activity in the first half of 2024 (January-June). Within this segment, the mid-segment accounted for the highest share (56 per cent) of the leasing activity, followed by the affordable segment with a significant share of 28 per cent.

Notably, the F&B and entertainment segments together represented approximately 30 per cent of the leasing volume in H1 2024, highlighting the growing significance of these categories in retail destinations. These categories are transforming shopping malls into vibrant and captivating spaces that go beyond mere shopping experiences. Developers have started dedicating a larger portion of their spaces to F&B and entertainment, aiming to create engaging and immersive environments that stimulate place-making in retail developments.

“Bengaluru, Delhi NCR, and Mumbai stood out as the leading cities in terms of gross leasing, accounting for a combined share of 62 per cent in H1 2024. Bengaluru recorded almost double the leasing activity of Mumbai and Delhi NCR, with a remarkable ~1 million square feet of transactions. The city showed significant leasing activity in prominent retail centres and key high streets. Additionally, it is interesting to observe that Bengaluru and Mumbai had the largest proportion of gross leasing in the Fashion and Apparel segment, while Delhi NCR stood out in the F&B segment,” said Rahul Arora, Head of Office Leasing & Retail Services, India, and Senior Managing Director (Karnataka, Kerala) JLL.

Given the positive demographics, stable economy, and the projected completion of high-quality retail developments within the next five years, the outlook for the retail segment is bright. India is likely to remain a key market for global brands looking to expand their store networks. As the retail market in India continues to evolve, the growing popularity of new concepts and trends, and the development of more destination-oriented shopping malls, which act as social meeting places and entertainment hubs, can be anticipated.