Fashion & homeware stores to lead leasing activity in India in 2023
30 March 2023, Mumbai
Indian retailers are expected to lease 5-6 million sq ft of space in 2023, almost reaching pre-COVID levels of 2019, according to property consultant CBRE.
Fashion and apparel, homeware, and department stores are expected to lead the leasing activity as they look to open more stores this year to overcompensate for slow expansion during the first two pandemic years.
Top companies including Reliance Retail, Aditya Birla Fashion and Retail, D'Mart, Tata's Trent, and Starbucks continue to add stores, while many brands are in search of bigger spaces. Retailers in India leased almost 4.7 million square feet of space across top cities in 2022. CBRE predicts that India’s strong domestic consumption will continue to strengthen the retail sector, which will see a strong supply pipeline in 2023, driving leasing activity.
Retailers are increasing store size by 30-40%, and some have even doubled their store size to give shoppers a better experience despite rising rentals. Consumers are increasingly looking for unique experiences, and retailers are adopting innovative concepts to draw crowds. The trend is mostly prevalent among food and beverage retailers, but other categories are also likely to adopt this approach to expand their footprint and existing customer base.
Indian consumers have remained confident about their personal economic situation despite the current global outlook, and although household spending has held up so far, consumers are likely to keep a close eye on inflationary pressures and their impact on commodity prices going forward.
