Retail Space Leasing Drops 1% in Q3 2024: Report

New Delhi, Nov 7 (PTI) Leasing of retail space in shopping malls and prominent high streets dropped 1 per cent to 1.63 million square feet during July-September across top eight cities, according to Cushman & Wakefield.

The leasing stood at 1.63 million square feet in the year-ago period.

Real estate consultant Cushman & Wakefield on Thursday released its Q3-2024 'Retail MarketBeat' report, which highlighted a sustained momentum across India's main streets, leading retail growth across the top 8 cities.

"Main streets dominated the leasing landscape, accounting for a remarkable 68 per cent of the total 1.6 million square feet leased this quarter," the consultant said.

Strong demand on main streets has pushed rental growth, particularly in Delhi-NCR, Bengaluru, Chennai and Kolkata, where rates surged up to 15 per cent year-on-year.

Saurabh Shatdal, Head Retail and Managing Director - Capital Markets at Cushman & Wakefield, said, "The Indian retail sector is evolving rapidly, and main streets continue to record high leasing due to limited mall supply."

"The strong demand-supply dynamic has driven rental growth, particularly in Delhi-NCR and Pune. Malls, however, faced a quieter quarter due to a lack of supply - a gap that we expect to be addressed in Q4," he added.

Retail leasing trends, led by fashion, F&B and accessories, reveal a clear shift toward more discretionary spending, highlighting the evolving lifestyles of Indian consumers, Shatdal said.

According to data, retail leasing in Ahmedabad fell 32 per cent to 0.06 million square feet in the July-September period from 0.09 million square feet in the year-ago period.

In Bengaluru, leasing of retail space grew 9 per cent to Rs 0.20 million square feet from 0.18 million square feet.

Leasing of retail space in Chennai declined 33 per cent to 0.15 million square feet from 0.23 million square feet.

Delhi-NCR too saw a fall of 39 per cent to 0.27 million square feet from 0.45 million square feet.

Leasing of retail space in Hyderabad rose 22 per cent to 0.49 million square feet from 0.40 million square feet.

Demand for retail space in Kolkata remained almost flat at around 0.05 million square feet.

In Mumbai, the leasing of retail space rose 74 per cent to 0.22 million square feet from 0.13 million square feet.

The leasing of retail space in Pune grew 51 per cent to 0.18 million square feet during July-September from 0.12 million square feet in the year-ago period.

Realty firm Paras Buildtech COO Kunal Rishi said, "India's retail landscape is evolving rapidly. This demand reflects the rising aspirations of consumers, the expansion of organised retail, and the growing need for premium retail destinations across the country."

With urbanisation set to reach nearly 40 per cent by 2030, he said, the demand for modern, strategically located retail spaces is increasing to cater to evolving consumer preferences.

"As consumer habits shift and more brands enter the market, the focus will be on creating environments that offer more than just shopping - integrating lifestyle, entertainment and community engagement," Rishi said.

While e-commerce continues to grow, he said the leasing activities highlight the enduring importance of physical stores in providing unique, experiential shopping that online platforms cannot replicate.

"The development of high-quality mall spaces will be key to supporting this evolution, offering retailers the infrastructure to meet the needs of a dynamic and rapidly changing market," he said.