Fashion, food and beverage brands emerged as major contributors to retail leasing growth in the September quarter, as companies expanded across malls and high-street locations ahead of festival season demand.
According to a report by Jones Lang LaSalle, India's retail sector leasing surged 65% on a YoY basis to 3.2 million sq ft during the three months between June and September. The surge takes total gross leasing for the year to September to 8.9 million sq ft, which represents 110% of last year's leasing activity.
The leasing activity was dominated by fashion and apparel, representing 35% of total leasing activity, and food & beverage represented 16% of total retail space take-up. The move was primarily dominated by leading brands, with domestic players spearheading the growth.
"Direct-to-consumer (D2C) brands have been making significant investments in their click-and-mortar strategies, progressively expanding their physical store presence across various retail formats, particularly in fashion and apparel, jewellery and beauty, and cosmetics and wellness categories. Looking ahead, D2C brands are positioned to capture an increasingly larger portion of the overall gross leasing activity," the report said.
Daily needs and groceries accounted for 11% total leasing; the category typically requires substantial space allocations and also serves as an anchor tenant in the premium retail development space.
Cushman & Wakefield, in its October report, also flagged entertainment as a growing avenue for retail leasing, closely chasing fashion and F&B space.
"The rising interest in fashion, F&B and entertainment categories points to a maturing consumer base with higher disposable incomes. This environment is encouraging domestic retailers to expand their footprint while attracting more international brands to India's high-potential market," said Gautam Saraf, Executive MD– Mumbai & New Business, Cushman & Wakefield.
The momentum reflects retailers’ push to align store expansion with the festive and year-end shopping period, which remains the strongest consumption window of the year.
According to data from JLL, indigenous brands leased 2.6 million sq. ft in the third quarter, representing a 76% YoY growth, while foreign brands accounted for a 19% share of leasing activity this quarter.
On a geographical basis, Delhi NCR accounted for 35% of gross leasing, primarily led by shopping malls. Hyderabad chased it closely, saw 12% of total gross leasing with strong interest in high street expansion.
Edited by Jyoti Narayan
Original Article
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