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A recent report by CBRE South Asia Pvt. Ltd. predicts continued growth and a stable supply environment in 2024. Let's explore what this means for shoppers and businesses, with some key numbers to consider.
The report highlights a shift in retailer priorities. Instead of rapid expansion, businesses are expected to focus on strategic locations with high foot traffic and strong consumer demographics. This could translate to a better shopping experience for consumers, with stores situated in convenient and well-maintained locations.
The construction of several high-quality malls in Tier 1 cities (major cities like Delhi and Mumbai) is expected to be completed by the end of the year. This will provide a boost to the retail sector by offering an estimated 5-6 million square feet of investment-grade mall space, creating a modern shopping experience with a variety of stores under one roof.
The report also identifies some retail categories poised for growth in 2024. Home decor is expected to see expansion in both online and offline formats, catering to the growing demand for home improvement products. Fashion and apparel stores are likely to continue expanding in Tier 1 cities, offering shoppers a wider selection of brands and styles. Domestic jewellery brands are also expected to see growth, reflecting the continuing popularity of Indian jewellery designs.
The report notes a growing interest in entertainment options alongside traditional retail experiences. This could lead to more cinemas, gaming centres, or other entertainment venues within malls and shopping complexes, creating a more well-rounded experience for visitors with an estimated 6-6.5 million square feet of retail space being leased in 2024, fuelled by primary leasing activity.
While the report predicts growth, it also suggests a cautious approach by retailers. Anchor stores and established brands are likely to expand strategically, prioritizing locations with strong growth potential. This cautious approach could also lead to a stabilization of rental prices for retail spaces, potentially benefiting both businesses and consumers.
Retail demand across investment-grade malls, prominent high streets and standalone developments has grown consistently since 2020. The year 2023 reported absorption of nearly 7.1 million square feet, a significant 47% year-over-year growth in Tier-1 cities. This growth was primarily driven by Bangalore, Delhi-NCR, and Mumbai, with the three major cities cumulatively accounting for nearly 61% of the leased space.
Overall, the CBRE report paints a positive picture for the Indian retail sector in 2024. A focus on quality, strategic expansion, and a diverse range of stores should create a more enjoyable shopping experience for consumers. With a stable supply environment and cautious approach by retailers, the market could become more sustainable and balanced.
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