India’sretail leasing activity soars amidst changing consumer landscape
13 November 2024, Mumbai
India's retail sector is witnessing a resurgence, with leasing activity across the country's top seven cities exceeding expectations. A recent JLL India report reveals that despite limited new retail space additions, gross leasing activity reached an impressive 5.3 million sq ft in the first nine months of 2024, and is projected to surpass 6.5-7 million sq ft by year-end. This rise is driven by a number factors, including rising consumption, the entry of international brands, and the evolving strategies of domestic retailers.
Key findings of the JLL India report
Robust leasing activity: Gross leasing across the top seven cities (Mumbai, Delhi NCR, Bengaluru, Kolkata, Chennai, Pune, and Hyderabad) is expected to reach 6.5 - 7 million sq ft by the end of 2024.
Limited new supply: Despite limited new retail space additions of just over 1 million sq ft, demand remains strong.
Concentration in metros: Bengaluru, Delhi NCR, and Mumbai lead the pack, accounting for 59 per cent of total leasing activity.
Sectoral breakdown: Fashion and apparel dominate with a 37per cent share, followed by food & beverage (18per cent) and entertainment (12per cent).
Luxury segment growth: High-end brands secured 0.15 million sq ft of space in the first nine months, primarily in Delhi NCR and Mumbai.
International retailer entry: 20 new international retailers entered India in the first nine months, with Delhi NCR being the preferred entry point.
Domestic retailer dominance: Domestic retailers accounted for 78per cent of gross leasing, occupying over 4 million sq ft.
Rise of D2C brands: Direct-to-Consumer (D2C) brands are increasingly leasing physical spaces, contributing to about 7per cent of total gross leasing.
Changing dynamics in Indian retail space
Several factors contribute to the dynamism and growth observed in the Indian retail market. A growing middle class with increased disposable income is pushing consumer spending and driving demand for retail goods and experiences. And consumers are increasingly seeking premium products and experiences, leading to an increase in demand for luxury retail spaces. Brands too are recognizing the importance of an omnichannel approach, integrating online and offline channels to provide a seamless shopping experience. This has led D2C brands to venture into physical retail.
Malls meanwhile are evolving into experiential spaces that offer more than just shopping, with entertainment, dining, and social interaction becoming key components. This attracts a wider range of consumers and encourages longer visits. India's growing economy and consumer market are attracting international retailers, leading to increased competition and a more diverse retail landscape.
The JLL India report highlights the strong growth of the sector, with leasing activity expected to maintain momentum in the coming years. The rise of omnichannel retail, the focus on experiential retail, and the influx of international brands are shaping the future of the Indian retail landscape, offering numerous opportunities for both domestic and international players.
