Leasing of retail space up 21% in 2022

Hyderabad: Leasing of retail real estate space during last year rose 21 per cent to 4.7 million square feet across eight major cities mainly on rising demand from food and beverage (F&B), fashion and apparel retailers, according to CBRE India.

The absorption of retail space in 2021 calendar year stood at 3.9 million square feet across Ahmadabad, Bengaluru, Chennai, Delhi-NCR, Hyderabad, Kolkata, Mumbai and Pune. The data denotes space take-up in investment-grade malls, prominent high streets and standalone developments. The leasing of retail space is still below 2019 (pre-Covid) level at 6.8 million square feet during 2019. The demand of retail space plunged to two million square feet in 2020 calendar year due to the nationwide lockdown to control the Covid pandemic.

Real estate consultant CBRE South Asia noted that key sectors that drove leasing activity in 2022 were fashion - apparel, F and B, hypermarkets, and homeware and department stores.

"The Indian economy is likely to remain steady despite tightening monetary conditions and recessionary global headwinds. Even though a challenging scenario across developed economies, retail leasing activity scaled a new high in 2022," said Anshuman Magazine, Chairman and CEO-India of CBRE.

Given the robust supply pipeline planned for 2023 and strong domestic consumption, the leasing activity is anticipated to remain steady, he added. "We also expect more international brands, especially in the F&B space, to enter the country," Magazine said.

As per the data, the absorption of retail space in Ahmadabad rose to 0.10 million square feet in 2022 from 0.03 million square feet in the previous year. The leasing activity in Bengaluru increased to 1.92 million square feet from 1.68 million square feet. Chennai saw an increase in demand of retail space to 0.45 million square feet from 0.26 million square feet, while Delhi-NCR witnessed surge in leasing to 0.96 million square feet from 0.36 million square feet.