Retail Space Demand In Malls, High-Streets Expected To Decline By 15% In 2024: CBRE
The demand for retail space in shopping malls and high-street locations in India is anticipated to decrease by up to 15 per cent in 2024, compared to the record levels witnessed in the previous year.
According to the latest insights from real estate consultant CBRE, in 2023, leasing activity for retail spaces surged by 48 per cent, reaching an impressive 71 lakh square feet across eight major cities, marking a significant rise from the 48 lakh square feet recorded in 2022.
CBRE's '2024 India Market Outlook' report forecasts a sustained demand for retail space, projected to range between 6-6.5 million square feet in 2024. The report also anticipates a stable influx of retail spaces as several high-quality mall developments near completion, contributing to the market's supply.
Approximately 5-6 million square feet of investment-grade mall space is slated to become operational in tier-I cities, as per CBRE's projections.
Anshuman Magazine, Chairman & CEO for India, South-East Asia, Middle East & Africa at CBRE, highlighted the cautious optimism prevailing among both retailers and consumers for the year ahead. He noted that while tier-I cities remain focal points for expansion, emerging tier-II markets are also attracting new players.
Magazine emphasised the evolution of malls into experiential centres, blending entertainment, dining, and shopping offerings. He highlighted a surge in leasing activity in the luxury retail segment, extending beyond metropolitan cities like Delhi and Mumbai to emerging markets such as Hyderabad and Ahmedabad.
Looking ahead, the report suggests that the home décor segment is poised for expansion across online and offline formats, while fashion and apparel retailers are expected to continue their growth trajectory primarily in tier-I cities.
Domestic jewellery brands are also anticipated to expand their footprint, and there's a growing interest among consumers in the entertainment category, which is likely to drive more leasing activity.
However, the report cautions that retailers, including anchor tenants and established brands, will adopt a cautious approach to expansion, prioritising locations with high visibility, foot traffic, and favourable consumer demographics. Consequently, rental growth is expected to stabilise across primary and secondary locations.
Ram Chandnani, Managing Director of Advisory & Transactions Services at CBRE India, highlighted the trend of foreign luxury retailers entering India through partnerships with local players. He noted a renewed optimism in the retail sector, with significant investments from developers in tier-I cities and institutional investors targeting tier-II cities, shaping a dynamic retail landscape amidst global economic challenges.
