In Q1 2024, approximately 1.1 million sq ft of retail space in organized retail centers and prominent high streets was leased, with the fashion and apparel sector leading the way. Mumbai, Delhi NCR, and Bengaluru collectively accounted for nearly 70% of this leasing activity, according to a new report by JLL.
In the first quarter of 2024, the fashion and apparel sector led retail store leasing, contributing 40% to the total volume of 1.1 million square feet, according to a report. This growth was driven by mid-segment brands, which captured 40% of the leasing activity, closely followed by value segment brands at 38%. The food and beverage (F&B) segment accounted for 21% of the leasing activity, with experiential dining brands—offering unique and memorable dining experiences—making up 38% of the F&B segment.
Other sectors contributing to the leasing activity included jewelry, lifestyle, automobiles, and banks. The gross leasing volume encompassed areas leased in both retail developments and prominent high streets, the report indicated.
The data, covering the top 7 cities—Delhi NCR, Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, and Pune—highlights significant trends in the retail leasing market. The report noted that 78% of the upcoming retail supply, approximately 45 million sq ft, is lease-based. This approach allows developers greater control over the quality of the tenant mix and day-to-day property management, enabling them to command higher rentals. Consequently, they can curate a diverse tenant mix that aligns with their development vision.
The organized retail market in India has experienced a surge in new developments in recent years, leading to an increase in the pace of launches across urban centers and emerging cities. This trend has motivated retailers to expand their footprint into newer micro-markets, bringing them closer to consumers. “The organized retail market in India has witnessed a surge in new developments over the past few years, leading to a heightened velocity of launches across urban centers and emerging cities. This has motivated retailers to expand their footprint into newer micro-markets, bringing them closer to consumers,” said Rahul Arora, Head of Office Leasing & Retail Services, India, and Senior Managing Director (Karnataka, Kerala), JLL.
Domestic brands led the retail leasing activity in Q1 2024, capturing a substantial 76% share, according to the report. During this period, seven international brands opened their first stores in India, with Delhi NCR and Mumbai emerging as the preferred locations. Most of these new entrants were in the beauty and cosmetics category, which has seen unprecedented growth in recent years.
In addition to global brands, leading domestic retail chains have also expanded into this segment. Many of these domestic stores are Multi-Brand Outlets (MBOs), which are facilitating the entry of global beauty and cosmetics brands into the Indian market.
