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India Real Estate: Retail leasing slows in 2024; Delhi-NCR, Bengaluru, Hyderabad lead activity

#Hospitality & Retail#India
Last Updated : 30th Jan, 2025
Synopsis

Retail space leasing in India's top eight cities fell by 10% in 2024, reaching 64 lakh sq ft compared to 71 lakh sq ft the previous year, according to CBRE. Despite the decline, experts foresee significant growth in 2025, with 50-60 lakh sq ft of Grade A malls set to open in Delhi-NCR, Mumbai, Bengaluru, and Hyderabad. While leasing in cities like Hyderabad and Chennai increased, others, including Delhi-NCR and Mumbai, saw declines. Mid-range fashion, athleisure, and jewellery segments continue to drive demand. Innovative retail strategies and evolving consumer experiences are expected to shape a strong revival in the sector.

The leasing of retail spaces in shopping malls and high streets decreased by 10% over the past year, amounting to 64 lakh square feet across eight prominent Indian cities, as per CBRE. In comparison, 71 lakh square feet were leased in the preceding calendar year. This data pertains to leasing activities within investment-grade shopping malls, high streets, and standalone developments.


Anshuman Magazine, Chairman & CEO for India, Southeast Asia, Middle East & Africa at CBRE, stated that India's retail sector is set for significant growth in 2025. He highlighted that primary leasing demand is gaining momentum, with 50-60 lakh square feet of Grade A malls expected to begin operations in cities such as Delhi-NCR, Hyderabad, Mumbai, and Bengaluru.

He further noted that leasing activities are anticipated to remain stable, supported by a strong supply pipeline and high demand from mid-range fashion, value fashion, athleisure, and jewellery segments. Retail spaces are progressively transforming into hubs for emotional engagement, blending shopping, dining, and entertainment to deliver holistic consumer experiences.

Magazine also pointed out that innovative strategies like social media engagement, quick commerce, and advanced inventory management are shaping the future of India's retail landscape, making it more dynamic and transformative.

City-wise data revealed varied trends. In Delhi-NCR, retail leasing dropped to 10 lakh square feet from 14 lakh square feet the year prior. Bengaluru's leasing activity remained stable at 19 lakh square feet. Mumbai experienced a decline to 8 lakh square feet from 10 lakh square feet, while Hyderabad saw an increase to 10 lakh square feet from 7 lakh square feet. Similarly, Chennai witnessed a modest rise to 7 lakh square feet from 6 lakh square feet, and Kolkata's leasing doubled to 2 lakh square feet. However, Pune's retail space absorption decreased to 6 lakh square feet from 8 lakh square feet, and Ahmedabad saw a decline to 4 lakh square feet from 5 lakh square feet.

Despite a decline in retail leasing last year due to supply constraints, the sector is set for a robust recovery in 2025, driven by the anticipated launch of new Grade A malls and sustained demand from key retail segments. With innovative approaches and evolving retail experiences, India's retail sector is gearing up for a transformative phase that promises to blend shopping, dining, and entertainment, ensuring a seamless and engaging experience for consumers.

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