High Streets Emerged as the Top Leasing Choice for Luxury Brands in 2023, With Over 100% Y-o-Y Growth: CBRE Report 

March 13, 2024: CBRE South Asia Pvt. Ltd. and PHD Chamber of Commerce and Industry, on Wednesday announced the findings of the joint report, ‘The Ascent of Indian ‘Luxe RE’. The report highlights luxury retail leasing patterns across various retail formats from 2022 to 2023. In 2023, stores across high streets, typically open marketplaces in a prominent area with a strong retail presence, remained the top choice for luxury brands in India’s top eight cities. Luxury brands leased 0.3 mn. sq. ft. of space in the high street store formats, registering over 100% Y-o-Y increase, while leasing in luxury stores in Malls stood at 0.24 mn. sq. ft., at over 300% Y-o-Y increase in 2023. Leasing in standalone stores by luxury brands stood at 0.1 mn. sq. ft. during the year, at over 200% Y-o-Y increase. 

The overall leasing by luxury brands across the formats stood at 0.6 mn. sq. ft. in 2023, at almost 170% Y-o-Y growth. While High Streets constituted a 45% share in the overall luxury retail leasing in 2023, luxury brands’ stores in Malls followed at 40% and standalone stores accounted for the remaining 15%. This surge in leasing has been accompanied by the entry and expansion of various international luxury fashion, watch and jewellery brands across different locations. The eight cities tracked for leasing include Delhi-NCR, Mumbai, Bangalore, Kolkata, Pune, Ahmedabad, Chennai, and Hyderabad.  

While several luxury brands are present in the prominent malls and high streets in India, there are specific malls and high streets that cater exclusively to the discerning luxury clientele. These select destinations are carefully curated to offer a unique luxury retail experience, featuring a concentrated collection of high-end brands and providing an environment that aligns with the expectations and preferences of luxury shoppers.

The flagship experience continues to be a compelling factor for physical retail across all touchpoints, including luxury brands. It presents a distinct opportunity for brands to demonstrate their essence, values and unique attributes. Luxury brands, in particular, benefit from the flagship experience as it allows them to create an immersive environment that enables them to engage with customers on a deeper level.

Factors leading to surge in luxury retail  

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Fuelled by a growing middle and upper class, India is witnessing a surge in demand for premium and luxury goods. This shift in consumer preferences is poised to reshape the retail landscape, transforming India into a crucial hub for global luxury brands. A confluence of factors such as rising disposable incomes, a growing desire for sophisticated lifestyles and the enduring influence of cultural heritage is expected to propel the luxury retail sector forward. This is likely to position India as a focal point for both discerning consumers seeking exclusivity and luxury brands eager to capitalise on this booming market. Beyond sheer spending power, the internet and social media have become game-changers. Constant exposure to luxury brands has skyrocketed awareness among these shoppers.

Further, luxury brands already established in India are actively seeking expansion opportunities in metro cities where their presence is currently limited. According to the report, these brands are also pursuing larger space take-ups in existing locations to accommodate their growing offerings and cater to the increasing demand. Affluent consumers from tier II cities, seeking a wider selection of luxury goods, often travel to the nearest metro cities rather than international locations to fulfill their shopping needs. This growth trajectory has prompted luxury brands to look beyond the top-tier metro cities and adopt an aggressive expansion approach by opening stores in cities such as Chandigarh and Ahmedabad. 

Expansion in footprint of luxury retail

India’s luxury retail landscape is rapidly evolving, underpinned by burgeoning consumer wealth and a strong inclination towards high-end brands. As this sector flourishes, it is reshaping the catchment areas of cities known for their luxury retail offerings.  The luxury retail sector is seeing significant developments, with the highest concentration in the Delhi-NCR region, which currently boasts nearly 80% of international luxury brands—a trend that appears to persist. Luxury malls in the Delhi-NCR region serve as a shopping haven for discerning customers across North India, while Mumbai attracts luxury shoppers from cities throughout Gujarat and Maharashtra. 

Bangalore effectively caters to the luxury needs of most major cities in the surrounding region, whereas Hyderabad boasts a sizeable catchment area for potential luxury retail growth. As Hyderabad continues to witness a growing influx of affluent residents, the allure of luxury brands is undeniable. Recognising its luxury market potential, prestigious luxury brands are making a beeline to establish a presence and capitalise on the city’s surging demand for high-end goods.

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Kolkata, despite having a relatively smaller luxury market presence, serves as an important destination for luxury shoppers from East India and international visitors, particularly from Bangladesh. While the luxury sector in Kolkata may be limited in size, it plays a significant role in catering to the discerning tastes of these consumer segments, offering exclusive shopping experiences and access to luxe brands. The recent inauguration of the Jio World Plaza in Mumbai and the Mall of Asia in Bangalore exemplifies the increasing interest of Indian consumers in luxury retail.

Anshuman Magazine, Chairman & CEO, India, Southeast Asia, Middle East & Africa, CBRE, said “India’s reputation as a sought-after tourist destination and  increasing international exposure have significantly influenced the demand for luxury retail. The luxury sector, which saw a significant increase in leasing in 2023, shows a promising trend with the entry and expansion of international brands. This positive momentum is expected to continue, aligning with our anticipation for a similar trend in the years ahead.  

Luxury brands are aggressively chasing new avenues to attract both seasoned and aspiring luxury consumers. As the demographics of these high-end shoppers continue to shift, brands are likely to recalibrate their strategies and expand their physical presence to capture a larger market share.”

Bimal Sharma, Executive Director & Head – Retail, CBRE India, said “Luxury brands are revolutionizing the shopping experience by crafting unique in-store environment. These experiential havens serve a dual purpose, fostering deeper customer engagement and amplifying the perceived quality of their products. By creating a lasting impression, these stores will likely empower customers to become brand ambassadors, sharing their experiences on social media and helping to expand the brand’s reach. Physical stores not only provide a powerful platform to showcase product lines but also help the brands cultivate a distinctive image.”

Sanjeev Agrawal, President, PHD Chamber of Commerce & Industry said “The Indian Real Estate sector is expected to touch $1-trillion mark by 2030 with affordable housing playing a significant role in the growth. The government has been making significant reform measures in the area of Real Estate Sector in India as these sectors have immense potential to generate employment for the growing young workforce.

The sector continues to embrace innovation and disruptive technological interventions, it ushers in significant shift in customer and investor experience and most importantly we will witness developers embarking on creating sustainable buildings using technology”.

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