Foreign luxury retailers to further expand India's retail leasing market

New Delhi: India's retail leasing market is expected to reach between 6 - 6.5 million square feet in 2024, driven mainly by primary leasing activities while the foreign luxury retailers are also entering in India, according to a recent report.

Highlighting the stable supply environment in the retail sector, the 2024 India Market Outlook by CBRE South Asia Pvt. Ltd, underscores the completion of several high-quality mall developments.

By the end of the year, an estimated 5-6 million square feet of investment-grade mall space is anticipated to become operational in tier-I cities of India.

Notably, the home decor segment is anticipated to witness growth in both online and offline formats. Additionally, fashion and apparel players are poised to expand their presence in tier-I cities across malls and high streets.

The report also notes the expected expansion of domestic jewellery brands and the rising interest of consumers in the entertainment category, potentially leading to increased leasing activity.

"India's retail sector saw remarkable growth in 2023. Looking ahead to 2024, both retailers and consumers are cautiously optimistic. While tier-I cities remain key expansion hubs, promising tier-II markets are attracting new players," said Anshuman Magazine, Chairman & CEO - India, CBRE.

In 2023, retail demand across investment-grade malls, prominent high streets, and standalone developments witnessed significant growth, with tier-I cities like Bangalore, Delhi-NCR, and Mumbai driving leasing activity.

"Foreign luxury retailers are entering India through partnerships with local players. The upcoming launches of a few brands underline this trend. This reflects a renewed optimism in India's retail sector, with investments from major developers in tier-I cities, while institutional investors target tier-II cities" said Ram Chandnani, MD, Advisory & Transactions Services, CBRE India.

According to the report, the adoption of Generative AI to enhance customer experiences, hyper-personalization of products and services, and strategic supply chain management are expected to shape the retail sector in India.

The report further highlights that the residential sector is currently undergoing a bullish phase in India, characterised by a convergence of factors that foster an extremely favourable ecosystem and in 2024 both sales and new property launches will sustain the sector's buoyancy.