India's retail sector is witnessing remarkable growth, attracting a surge of foreign retailers and luxury brands aiming to establish a strong presence in key locations nationwide. This positive trend has led to retail leasing in the first half of 2024 reaching a 5-year high, with an impressive 3.1 million sq. ft. leased across eight cities. This surge is a clear indicator of the growing appeal of the Indian market among international brands.

In the first half of 2024, notable international luxury brands like Maison Margiela and Time Vallée made their entry into India. This move is largely driven by evolving lifestyles and increased global aspirations among Indian consumers, which have significantly boosted the demand for luxury goods. Other prominent brands such as Breitling and Michael Kors have expanded their footprint to cities like Chennai and Pune. Additionally, Daiso Japan and ILEM Japan have opened stores in Chennai, while Charles Tyrwhitt and Franck Provost launched their first outlets in Mumbai and Bengaluru, respectively.

According to Mr. Anshuman Magazine, Chairman & CEO - India, South-East Asia, Middle East & Africa, CBRE, “Retail absorption increased in the first half of the year annually. The ongoing introduction of quality supply is expected to continue stimulating an uptick in overall space take-up in the coming quarters.” This optimistic outlook underscores the potential for sustained growth in India's retail sector.

The fashion and apparel segment emerged as a strong performer in the first half of 2024, driven by mid-range, value fashion, and athleisure brands, which collectively accounted for 39% of the market share. Other sectors such as entertainment (13%) and homeware and department stores (11%) also played significant roles in driving leasing activity.

Tier-II cities like Chandigarh, Jaipur, Lucknow, Indore, and Kochi experienced substantial retail space take-up, with Indore and Kochi leading the absorption with 0.4 million sq. ft. of space. This trend highlights the growing importance of these cities in the retail landscape.

Mr. Ram Chandnani, Managing Director, Advisory & Transactions Services, CBRE India, highlighted that developers are increasingly integrating D2C brands into physical retail formats. In the first half of 2024, approximately 0.5 million sq. ft. of retail space was added in tier-I cities, with expectations of further increases in the second half of the year. New malls set to begin operations in Bengaluru, Hyderabad, and Mumbai are projected to add 3-4 million sq. ft. of retail space, further fueling the sector's growth.

In conclusion, India's retail sector is poised for continued expansion, driven by robust demand for quality retail spaces, evolving consumer lifestyles, and the increasing presence of international luxury brands. The strategic expansions and new mall developments in major cities signal a vibrant future for the retail market in India.

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