Experiencing a notable 15% surge in the first half of 2023 compared to the latter part of 2022, retail leasing remains a driving force behind India's commercial real estate (CRE) growth, as highlighted in the CBRE report titled 'India Market Monitor Q2 2023.'
The momentum in Indian retail leasing continues its impressive trajectory, showcasing a remarkable 24% year-on-year growth in the first half of 2023. As the post-pandemic era witnesses a resurgence in activity, individuals flock to shopping malls, high-street retail shops, and office spaces, resulting in a significant increase in primary and secondary retail leases.
Delhi-NCR stands out with a consistent upswing in retail lease deals, registering a substantial 65% year-on-year increase in closures from January to June 2023, according to CBRE South Asia's August 2023 analysis.
Saransh Trehan, Managing Director of Trehan Group, emphasizes that Tier 2 and 3 cities are not just attracting retail brands for expansion but are becoming significant investment hubs. Trehan Group's Urban Square Galleria in Alwar, Rajasthan, is witnessing positive interest from multiple food and F&B brands, with Miraj Cinemas already operational, providing a world-class movie experience. Malls are evolving into entertainment hubs, drawing in crowds, especially on weekends, contributing to the booming phase of commercial real estate in Tier 2 and 3 cities.
Vikas Garg, Joint Managing Director of Ganga Realty, notes that high-street retail projects are thriving in Delhi-NCR's commercial realty markets. Space constraints in major cities have led developers to launch high-street projects in residential sectors, catering to local and hyperlocal consumer markets and reaping substantial profits. The eagerness of prominent food and fashion labels to expand to new regions has further emboldened developers to venture into untapped locations.
Amidst this growth, the commercial real estate sector is rebounding strongly from the pandemic setback. The future outlook appears promising, given the current trends and the rapid expansion of commercial developers into new real estate frontiers.