India’s tier I cities witnessed retail leasing activity of ~6.4 million square feet (sq ft) in calendar year (CY) 2024, with ~3.2 million sq ft absorbed during the July-December (H2) 2024 period, CBRE said in a press release.
Bengaluru drove the retail space take-up in H2 2024, followed by Hyderabad and Delhi-NCR—these three cities cumulatively accounted for ~58 per cent of the total retail space absorption in the July-December period.
Key consumer drivers include a 2 per cent year-on-year (YoY) increase in consumer confidence, 9 per cent growth in retail sales (2025 forecast vs 2024), and 6 per cent growth in consumer spending (2025 forecast vs 2024). These indicators signal a positive outlook for the retail sector, supporting continued expansion in fashion and apparel categories.
Domestic transactions accounted for a significant 77 per cent of activity, indicating strong local demand.
Sustained demand for quality retail space resulted in an increase in rental values on a half-yearly basis in select micro-markets across most cities and retail formats. Adjustments to project timelines, with some completions deferred to 2025, resulted in ~0.7 million sq ft of grade A mall supply during H2 2024.
However, a robust supply pipeline is anticipated in 2025, with investment-grade assets expected to commence operations in a few tier-I cities.
The direct-to-consumer (D2C) sector witnessed strong growth, contributing ~7 per cent to the overall retail leasing activity in CY 2024, added the release.
Despite persistent inflation in the country, consumer spending and retail sales are expected to sustain steady momentum in 2025, particularly in discretionary categories such as apparel and footwear, recreational and cultural goods, and services.
ALCHEMPro News Desk (SG)
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