According to CBRE, about two dozen international brands entered India and expansion by global brands that are already present in the country have fuelled the demand.
Retail leasing by international brands is almost 25% in 2023 compared to 14% in the previous year.
Canadian lingerie retailer La Vie en Rose made its debut in India in partnership with Apparel Group India and launched its first store in Delhi-NCR in July 2023 and later expanded in Pune and Bangalore.
Similarly, Rimowa, a German luxury luggage brand, entered India through its partnership with Reliance Brands and opened its first store in Mumbai.
Other notable expansions by international players include French fashion & apparel brand Bugatti Fashion and the American furniture brand West Elm opening their stores in Pune, and American lingerie brand Victoria’s Secret opening stores in Hyderabad and Pune. “The luxury sector, which saw a 162% increase in 2023, shows a promising trend with the entry and expansion of international brands. This positive momentum is expected to continue, aligning with our anticipation for a similar trend in the years ahead,” said Anshuman Magazine, Chairman & CEO, India, Southeast Asia, Middle East & Africa, CBRE.India has emerged as one of the most promising consumer markets, indicating heightened retailers’ interest in new setup, expansion and upgradation of stores.
Demand for retail spaces in recently completed malls played a significant role in shaping the overall retail space occupancy during the year, and nearly 30% share in total absorption was led by primary leasing in these malls.
“As retail leasing in major tier II cities of India (Chandigarh, Lucknow, Jaipur, Indore and Kochi) surges to 1.2 million sq. ft. in 2023, we witness a transformative shift led by sectors such as fashion & apparel, homeware, entertainment, and hypermarkets, commanding over 70% of leasing activity. The increased demand for organized retail spaces has attracted leading developers and institutional players to these markets, evolving retail formats from vanilla stores to shopping malls, department stores, hypermarkets, and dedicated entertainment zones,” said Ram Chandnani , Managing Director, Advisory & Transaction Services, CBRE India.
Additionally, the total retail supply also reached a historic peak at 6 million sq ft in 2023, over 316% Y-o-Y increase. This rise in supply can be attributed to the commencement of operations of 12 investment-grade malls located in Bangalore, Pune, Mumbai, Hyderabad, Ahmedabad, Delhi-NCR and Chennai.
The retail leasing in 2023 was predominantly steered by fashion & apparel, with a 32% share in total leasing. This was largely influenced by mid-range fashion value and athleisure brands.
Homeware and department stores accounted for a 17% share, followed by food & beverage with a share of 12%, luxury at a 9% share, and consumer electronics at 6% share in overall leasing during 2023.
The anticipation of increased mall supply and favourable consumer spending patterns is expected to encourage expansion among both international and domestic retailers in the future.
