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Retail Leasing Expected to be Firm in 2024, Reaching 6-6.5 mn sq ft: CBRE

April 10, 2024: CBRE South Asia Pvt. Ltd., on Wednesday announced the findings of its report, ‘2024 India Market Outlook’. The report highlights key trends and projections for the Indian real estate sector this year. According to the report, the estimated leasing in the retail sector is expected to sustain between 6-6.5 mn. sq. ft. in 2024, fueled by primary leasing activity. The report also highlights a stable supply environment for the retail sector in 2024 due to the completion of numerous high-quality mall developments. By the year-end, 5-6 mn. sq. ft. of investment-grade mall space will become operational tier-I cities.

In 2024, among the retail categories, the home décor segment is likely to expand in online and offline formats, while fashion and apparel players will continue expanding in tier-I cities across malls and high streets. Domestic jewellery brands are also expected to continue to expand. Emerging as an alternative to traditional cinema halls, the growing interest of consumers in the entertainment category is likely to lead to more traction in leasing as well. 

The report indicates that retailers, including anchor tenants and established brands, are expected to proceed cautiously with expansion plans. They will prioritize locations with high visibility, strong foot traffic and favourable consumer demographics. As a result, rental growth is expected to rationalize across both primary and secondary locations. Moreover, while well-established domestic brands with a solid presence are likely to proceed cautiously with their expansion plans, international newcomers aiming to establish themselves, especially in tier-I cities, are anticipated to persist with their expansion strategies despite global economic challenges.

Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE, said, “Driven by robust consumer demand, India’s retail sector saw remarkable growth in 2023. Looking ahead to 2024, both retailers and consumers are cautiously optimistic. While tier-I cities remain key expansion hubs, promising tier-II markets are attracting new players. Malls are transforming into experiential centres, offering a mix of entertainment, dining and shopping.  Fuelled by pent-up demand and strategic expansion, India’s luxury retail sector is experiencing a leasing boom, attracting both established brands deepening their presence and new international players entering the market. This expansion reaches beyond Delhi and Mumbai to the newer markets like Hyderabad and Ahmedabad.”

Ram Chandnani, Managing Director, Advisory & Transactions Services, CBRE India, said, “Foreign luxury retailers are entering India through partnerships with local players. The upcoming launches of a few brands underline this trend. This reflects a renewed optimism in India’s retail sector, with investments from major developers in tier-I cities, while institutional investors target tier-II cities, creating a dynamic retail landscape.”

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 sq. ft., a 47% Y-o-Y growth in tier-I cities. Leasing activity was primarily driven by Bangalore, Delhi-NCR and Mumbai, with the three cities cumulatively accounting for nearly 61% share.

Things to watch out for in 2024:


  • Generative AI driving retail transformation: Indian retailers harness the power of Generative AI to enhance online and in-store experiences, automate tasks like product descriptions and offer virtual customer assistance.
  • Hyper-personalisation revolutionises retail: Retailers shift towards hyper-personalisation, tailoring products and experiences to individual customers to optimize inventory management and boost satisfaction, loyalty and sales.
  • Strategic supply chain management in a hyperconnected world: Indian businesses adapt to a strategic approach to supply chain challenges by implementing enhanced planning and optimization practices. Inventory management software aids in efficient stock tracking and maintaining optimal inventory levels. The growing e-commerce sector and scarcity of raw materials underline the importance of proactive supply chain strategies.

Future of Retail Space: A Multifaceted Experience

  • Experiential retail transformation: Malls are evolving from mere shopping centres to vibrant hubs, offering entertainment like cinemas, gaming zones and live performances, catering to modern consumers seeking immersive experiences.
  • Culinary revolution: Food and beverage (F&B) offerings within malls are diversifying, offering unique dining experiences, themed restaurants and food festivals, transforming malls into gastronomic hubs with innovative layouts and designs.
  • Design adaptability: Modern malls prioritize flexible design, allowing spaces to be repurposed based on trends and events, accommodating pop-up shops, product launches and community gatherings for a dynamic retail environment.
  • Technology integration: Malls are incorporating technology like smart parking solutions, mobile apps for personalized recommendations and augmented reality (AR) displays to enhance the shopping journey and offer immersive experiences.



I&L supply will see an addition of 35-37 mn. sq. ft. in 2024, leasing to be driven by 3PL players and E&M firms

Driven by the increasing adoption of multipolar strategies, India’s Industrial and Logistics (I&L) sector is poised for sustained growth in the coming quarters. Leasing activity is expected to maintain its 2023 highs, demonstrating the sector’s resilience even amidst potential global and domestic economic headwinds. 

  • Demand for the I&L sector is anticipated to remain strong in the upcoming quarters, with occupiers expected to continue adopting their ‘multipolar’ supply chain strategies. 
  • Cities such as Mumbai, Bangalore, Hyderabad, Pune and Ahmedabad will likely drive the demand, with space take-up expected to be rangebound of the 2023 levels. However, leasing activity is expected to normalise in cities such as Delhi-NCR and Chennai over the next few quarters. 
  • Demand for logistics services is expected to increase due to the growing reliance of occupiers on their distribution networks. The 3PL providers are anticipated to drive the demand, followed by E&M firms. 
  • Supply addition is expected to normalise in 2024 with a projected range of 35-37 million sq. ft., following a peak in the previous year. 
  • Developers are expected to prioritise the supply of new-age, future-proofed assets to meet occupiers’ growing demand. 
  • Surge in Grade A building supply in 2023 to continue in 2024, driven by occupier demand.
  • Leading developers to focus on green certifications and sustainable facilities to attract occupiers and enhance portfolio value.

Top trends expected to shape 2024

  • Tier-II and III cities attract interest from occupiers and developers due to enhanced infrastructure, robust consumer base and growing internet penetration.
  • Occupiers prioritize last-mile logistics for customer satisfaction and competitive edge, opting for warehousing like micro-fulfilment centres and in-city warehouses, driven by demand for ‘same-day’ and ‘instant’ deliveries.
  • ESG-compliant buildings critical in the I&L industry; absorption of green logistics space to rise with market awareness and compliance requirements.

Property sales and launches expected to sustain sector buoyancy in 2024

The residential sector is currently undergoing a bullish phase, characterised by a convergence of factors that foster an extremely favourable ecosystem. As we progress into 2024, we anticipate that both sales and new property launches will sustain the sector’s buoyancy. Despite the potential challenges posed by escalating land costs and limited funding options for early-stage projects, the robust underlying market fundamentals are expected to propel residential activity well above the average trend witnessed in the previous five years.

  • Mumbai, Hyderabad, Pune, and Bangalore will likely drive the supply infusion during 2024. 
  • Escalating capital values to redefine the erstwhile Mid and High-end ticket sizes; noticeable activity expected across premium and luxury categories.
  • Homeownership rates to increase; average home loan ticket size on the rise.
  • Modern homebuyers are now equipped with comprehensive knowledge regarding a developer’s reputation, execution capability and financial standing. Consequently, there has been a noticeable shift in buyer preferences when making a luxury home purchase.
  • Many top-tier developers have already expanded or are planning to expand beyond their local markets, with some even venturing into tier-II cities to take advantage of the strong sales momentum and promising growth prospects.

Top trends expected to shape 2024

Encouraged by the larger trend of ‘flexible-work-environments’, buyers are increasingly looking for spacious private living spaces, thereby driving the demand for independent floors and plotted developments.

The ongoing mega infrastructure projects in the country, encompassing transportation networks, highways, airports and metro systems, are expected to support the growth of real estate and in fact create new nodes for residential real estate.


The burgeoning population of UHNIs and HNIs in India presents a compelling opportunity for luxury hotel chains to expand their branded residence portfolio. 


India’s office market poised for stability in 2024 amid global economic uncertainties

Enhanced by robust domestic growth, improved mobility and a resurgence in office sentiments, the office sector in India outperformed expectations, witnessing a surge in deals during the latter half of 2023. The office absorption witnessed a growth of 11% Y-o-Y, reaching 64.4 million sq. ft., marking it as the second-highest annual leasing activity since the peak of 66.6 million sq. ft. observed in 2019.  This leasing activity was led by Bangalore, Delhi-NCR, Hyderabad and Chennai, accounting for nearly three-fourth share.

  • Office market expects healthy supply in 2024, with new completions increasing by 3-5%, led by high-quality investment-grade assets.
  • While traditional hubs such as Bangalore, Hyderabad and Delhi-NCR remain attractive, Chennai and Pune are also gaining traction due to quality space, talent availability and economical rentals.
  • The BFSI and E&M sectors, leveraging India’s talent pool, are driving demand for large modern office parks as they advance their digitisation efforts.
  • GCCs are projected to retain a 35-40% share of leasing, fuelled by expansion of current operations and entry of smaller firms attracted by India’s value proposition. 

Top office sector trends expected to shape 2024

  • India’s office market is expected to stay strong in 2024 despite global economic worries. Occupiers are likely to seek quality space for expansion and consolidation, focusing on cost efficiency. Increasing return-to-office trends may drive pent-up demand. A skilled workforce and a strong business ecosystem are likely to bolster an optimistic outlook.
  • Top developers in India prioritise constructing green-certified office spaces, meeting the rising demand for eco-friendly workplaces. Currently, 45% of the country’s total office stock is green-certified, with their share in new completions rising since 2018. This trend is expected to continue, with the proportion of sustainable buildings increasing further.
  • Occupiers prioritise experiential workplaces promoting collaboration, productivity, and well-being. This entails investing in high-quality assets with desirable amenities to foster a vibrant and engaging environment.
  • Economic growth and strategic policies are driving a dynamic transformation in India’s office market, attracting diverse industries beyond the traditional dominance of the technology sector. While the demand continues to be led by tech firms, the appetite for office space from BFSI and E&M companies is increasing. 
  • The gateway cities would continue to witness demand, however demand is likely to broaden with cities such as Chennai and Pune witnessing increased activity. Readily available talent, improved infrastructure and competitive rentals in these cities continue to attract both tech and non-tech companies.
  • Robust economic growth empowers domestic companies to drive demand for office space, investing in expansion to solidify market presence.
  • A significant surge is expected in GCC activity, with the leasing of about 40-45 million sq. ft. between 2024 and 2025, driven by large campus establishments. By 2025, the GCC sector is projected to expand by 20%, led by the tech, BFSI and E&M industries. Emerging sectors such as life sciences, automobiles, aviation and electronics are also set to join the expansion wave. This growth will likely increase leadership positions within GCCs, solidifying their role as strategic centres for organisational growth.


Flexible space operators have been key players in India’s office leasing, consistently contributing a share of over 15% to the overall space take-up in the last five years. Primarily led by demand from medium and large enterprises, flexible space operators are likely to increase their footprint across cities. 

  • Currently, India’s flexible space stock across the top nine cities is about 64 mn. sq. ft., with Bangalore and Delhi-NCR cumulatively contributing over 50%. This stock has the potential to touch 80 mn. sq. ft. by the end of 2024, indicating significant growth.
  • With a current stock of over 3.6 million sq. ft., flexible workspace operators are seizing the untapped potential of tier II markets, rapidly expanding their presence to offer diverse options for both start-ups and established businesses.

Overall, the flexible space growth is not just a trend but a stable and promising market. It is fuelled by the consistent demand from large enterprises, start-ups, and GCCs setting up R&D operations. Operators are thriving through their flexibility, innovation, and technology adoption, ensuring a secure and prosperous future.