Retail leasing in India has been witnessing an upward trajectory aided by elevating demand for retail space. Traditional retail spaces are becoming increasingly popular nationwide as millennial consumers still prefer the physical shopping experience despite the growing popularity of e-commerce. Additionally, unlike e-commerce, retail spaces offer consumers the desirable touch and feel experience.
According to an industry report, retail leasing grew by 114% during January-September 2022 to 3.4 million square feet, up from 1.6 million square feet during the same period the previous year. The report also states that leasing in the retail sector grew by more than 40% year-over-year in Q3 of 2022.
Retail real estate players and mall developers are ecstatic about the windfall gains they are experiencing at the moment. For instance, leading developers like Omaxe Ltd, Trehan Iris, Vatika Ltd, and Smartworld Developers are witnessing healthy traction and are optimistic about its prospects. A bullish outlook prevails for retail leasing as the malls across India have had significant sign-ups in the last couple of months.
For instance, Trehan Iris has leased over 1 lakh sq. ft. area in Iris Broadway, Gurugram, between January 22 and September 22, and is getting overwhelming response from brands expanding their brick-and-mortar footprint.
Talking about this, Abhishek Trehan, Executive Director, Trehan Iris, said, “The retail sector is infused with positive sentiments and the current leasing trend reflects the sector’s sustained growth momentum. Driven by aggressive expansions of domestic and global brands, the demand for Grade A retail space is likely to continue the impressive growth. Some of the prominent brands like Starbucks, Croma, Max Fashion, Fab India, Mr. DIY, McDonald’s, Beer Cafe, and HDFC have started their operations, and recently SOCIAL, Daryaganj, and Studio XO have been signed, among others.”
During this period 23 brands have either signed up or started their operations in Iris Broadway.
He added, “We have witnessed remarkable growth from various brands across fashion, entertainment, consumer electronics, personal & baby care, and F&B outlets, and as a result, the centre is 95% leased. We have witnessed considerable traction in the last three quarters of 2022 and anticipate a surge in leasing activity in the next quarter as well.”
Owing to upbeat market sentiment, industry players believe that retail leasing will reach new heights by the end of 2022.
Omaxe Ltd, one of the leading real estate developers in India, claims to have witnessed remarkable responses in its retail properties across centers. The company has leased approx 5,46,657 sq. ft. of retail space across its properties in Greater Noida, Faridabad, Patiala, Amritsar, Indore, Ludhiana, Chandigarh, and Gurugram between January and September 2022. The leased area will have a variety of brands, including retail, F&B, hospitality, entertainment, and gaming services, providing Omaxe’s portfolio with a diverse brand mix.
Siddharth Katyal, Group Director & Business Strategist, Omaxe Ltd, said, “The demand for retail space is skyrocketing in India, leading to a dramatic surge in retail leasing. Economic growth, rapid urbanisation, shifting consumer preferences, upbeat market sentiments, and extensive brand expansions are driving retail leasing activities across the country. If the current pace continues, retail leasing will hit record highs by the end of Q4 2022.”
Brands such as Arrow, Siyaram, and Mr. DIY amongst others have recently started their operations at OCP Mall, Greater Noida. Similarly, Domino’s Pizza and Smaash are a few of the key brands that have started operations at New Chandigarh Clocktown, and Novelty Mall, Amritsar, respectively.
Post-pandemic, this year the retail segment has seen a sharp recovery as consumers return to real shopping venues.
Ritu Gupta, Head Corporate Leasing, Vatika Ltd, said, “High Street Shopping has emerged as a preferred option for retailers’ expansion. Vatika Group has made ‘Town Square 2’ operational in New Gurgaon with 60% of the area being leased. Delivery of our new projects like Crossover, and Seasons is scheduled in the next few months and we are in discussions with prominent retailers for precommitments. We are the largest retail developer in New Gurgaon with investments being made by Vatika contributing to 67% retail share compared to other developers in New Gurgaon.”‘
Echoing similar views, Vivek Singhal, CEO, Smartworld Developers, said, “With diminishing open spaces, high street retail projects have become the go-to place for food, shopping, and entertainment requirements. Looking at the increasing demand, we have launched our premium high street retail project, ‘Smartworld Orchard Street’ that will offer world-class F& B, shopping, and entertainment experiences to our patrons. Located in the heart of Golf Course Road (Extn.), the project has already attracted interest from leading brands. On the day of the launch, we signed an agreement with Big Fish Ventures to lease the entire third floor.”
Consequently, retail brands have been bolstering physical space, creating an upbeat market sentiment for retail leasing.