In some areas of Delhi NCR, rental yields have increased by 6–8%, reflecting the market’s strength and the rising demand for Grade-A office spaces and premium retail premises
Bengaluru: Retail leasing activity across the Delhi NCR witnessed an increase in the second half of 2022, as per latest research by CBRE South Asia. According to the research titled “India Retail Figures H2 2022,” demand for retail and commercial space in India continues to rise, leading to a rise in the number of buildings designed to house both retail and office occupants.
Periodic increases in retail space leasing are a result of the improved quality and variety of commercial real estate developments compared to traditional brick-and-mortar construction, says the report.
“Rising rental yield in commercial properties are indicative of shifting consumer preferences. The data shows that the Indian retail industry is growing fast and attracting global brands. In some areas of Delhi NCR and Bengaluru, rental yields have increased by 6–8%, reflecting the market’s strength and the rising demand for Grade-A office spaces and premium retail premises,” said Kunal Rishi, chief operating officer, Paras Buildtech.
Based on annual and semi-annual leasing activity, the survey found that Delhi-NCR and Bengaluru are the top two regions. The amount of retail space rented out each year went up by 21% from 2021 to 2022, adding 4.7 million sq ft. Even though online shopping became more popular, the trend towards traditional storefronts kept going in the years after the pandemic.
“Delhi-NCR is likely to become one of the top Indian cities accounting for nearly half of the upcoming mall supply over the next four to five years. With the region’s attractive business environment and the entry of prestigious brands, along with an expansion of existing brands, retail leasing in Delhi-NCR will become more appealing in the years ahead,” said Jatin Goel, director, Omaxe Ltd.
From July to December 2022, the fashion and apparel brands were responsible for about 42% of all leasing, which shows that they are focused on growth. The research also showed that multinational companies are renting out more retail space in India.
According to Navdeep Sardana, chairman of Whiteland Corporation, “The report indicates a substantial increase in demand for retail and commercial space in the region, leading to a rise in buildings designed for both retail and office occupants. The rise can be attributed to the enhanced quality and variety of commercial real estate developments, which offer a better alternative to traditional brick-and-mortar construction.”
There was a 4-8 percent increase in rent in some parts of Delhi-NCR and Bengaluru. The study found that over 60% of international retail brands had increased regional presence, serving new client verticals in both metro and non-metro areas in the country.
“The emergence of mixed-use developments is expected to drive the continued expansion of high-quality and diverse commercial spaces. This represents a promising time for the real estate sector, and we are eager to participate in the development and expansion of India’s retail industry,” said Shashank Vashishtha, executive director, eXp India.
According to the research, retail leasing activity increased by 5% from the previous half-year, reaching 2.43 million sq ft in the second half of 2022. As older, less interesting commercial buildings have been replaced by newer, better ones, the number of people looking to rent retail space has gone up. This tendency was expected to continue as the Indian retail market continued to expand.
CBRE Group, Inc. is a commercial real estate services and investment firm founded in 1906. The company forayed into India in 1994.