Booming Retail Leases in India
On the back of sustained demand and declining mall vacancy rate trends, India's retail leasing market is witnessing a significant upswing. As per a recent Anarock report, vacancy rates have dropped notably from 15.5% in 2021 to 8.3% in the first half (H1) of the ongoing fiscal year (FY).
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Growth levers
1. Consumer Demand Tailwind: The market has experienced sustained growth over the last three years (3), in excess of 3.1 million square feet of retail space leased in the first six months (H1) of the year 2024 alone.
2. Evolving Retailer Preference Dynamics: Interestingly, smaller retail spaces currently hold greater appeal; this preference may shift as new retail developments emerge, given shifting trends that bring more value to the table, presenting an opportunity of a spectrum of new options offering a wider range of options.
3. Regional/Zonal Market Take Leadership: Leading metropolitan areas, entailing Delhi-NCR, MMR, Hyderabad, etc., are anticipated to lead the market, interestingly accounting for over 85% of the estimated retail space pipeline.
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Decode: Market Outlook
Given the secular trends, high-street rental rates are projected to maintain their uptick until a significant surge in premium retail spaces enters the market.
With constant growth driven by consistent consumer demand tailwinds and a promising pipeline of new developments, India's retail market is set to usher in continued expansion and traction metrics.
CREDITS: Anarock report