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Retail leasing grows 21% Y-o-Y in 2022

January 19, 2023: CBRE South Asia Pvt. Ltd., on Thursday announced the findings of its report, ‘India Market Monitor 2022’. The report highlights real estate growth, trends, and dynamics across all asset classes in India.

According to the report, retail leasing grew by 21% Y-o-Y in 2022 to 4.7 mn sq. ft. in 2022. Supply in 2022 stood at 1.4 mn sq. ft. Overall, Bangalore and Delhi-NCR had a major share (61%) in leasing activity in 2022, while Chennai, Hyderabad, and Pune had a 9% share each. Supply addition in Bangalore was the highest, with a share of 86%, followed by Pune (14%) in 2022. Key sectors that drove leasing activity in 2022 were fashion & apparel, Food & Beverage (F&B), hypermarkets, homeware & department stores.  

On a quarterly basis, retail leasing stood at 1.6 mn. sq. ft. with a growth of 79% in the Oct-Dec quarter over the Jul-Sep quarter, while the supply in Oct-Dec quarter stood at 1 mn. sq. ft. During the Oct-Dec 2022 quarter, the report highlights that Bangalore (41%), Delhi-NCR (27%), Chennai (9%), and Hyderabad (7%) led the absorption. On a pan-India basis, Bangalore recorded the highest share of mall completions, with a share of 79% in Q4 2022, followed by Pune (21%). Key sectors that drove the leasing activity in Q4 were fashion & apparel (37%), homeware & department stores (12%), hypermarkets (10%), F&B (10%), and luxury (7%). The report highlighted quarterly rental growth (mall) in select pockets of Delhi-NCR (Noida 12-16%, Vasant Kunj 8-12%, Saket District Centre 8-12%) and Bangalore (East 3-8%). A 5-9% rental growth in the high streets of Kammanahalli/HRBR Layout in Bangalore and Sector 29, Gurgaon was also recorded.

In Q4 2022, the regional share of leasing activity was led by domestic corporates (73%), EMEA corporates (11%), APAC corporates (11%), and American corporates (5%).

Anshuman Magazine, Chairman & CEO – India, South-East Asia, Middle East & Africa, CBRE, said “The Indian economy is likely to remain steady despite tightening monetary conditions and recessionary global headwinds. Even though a challenging scenario across developed economies, retail leasing activity scaled a new high in 2022. Given the robust supply pipeline planned for 2023 and strong domestic consumption, leasing activity is anticipated to remain steady. We also expect more international brands, especially in the F&B space, to enter the country.”

Ram Chandnani, Managing Director, Advisory & Transactions Services, CBRE India, said, “Going forward, we expect retail leasing to gain traction in Tier II, III, and even IV cities as retailers and landlords are looking to leverage the purchasing power of these towns and cities. Activity in these cities will remain strong from domestic retailers, with international retailers expected to be more active in the apparel and QSR segments.”

Retail outlook:


  • Leasing likely to strengthen further, given the strong supply pipeline and strong domestic demand, although global headwinds might cause a short-term anomaly
  • Entry of more international brands, especially in the F&B space, likely while expansionary demand from domestic brands to continue
  • Tier-II, III and even IV locations to gain traction as retailers look to leverage the spending power of these towns and cities
  • Hybrid shopping focusing on the convergence of offline and online likely to remain a key retailer strategy
  • Domestic brands to strengthen their presence across all retail categories, with consolidation, acquisition and partnerships remaining key to their expansion strategies

Other sector observations

Investment: Investment activity in real estate surged to an all-time high in 2022

  • Overall capital inflows in 2022 up by 32% Y-o-Y (USD 7.8 billion)
  • Overall capital inflows in Q4 2022 up 64% Q-o-Q and 115% Y-o-Y (USD 2.3 billion)
  • 48% share of land/development sites, which dominated investments in 2022; followed by the office sector (35%)
  • Delhi-NCR overtook Mumbai with the highest share of investments; cumulatively, the two cities accounted for over 56% of the investments in 2022
  • Institutional investors led 2022 investment activity with a share of nearly 51%, followed by developers (32%). Institutional investors continued to infuse equity in a mix of greenfield and brownfield assets, whereas developers remained primarily focussed towards greenfield investments
  • 44% of the total capital inflows in site / land acquisitions during 2022 were deployed for residential developments, while 25% were committed for mixed-use developments
  • 57% share of foreign investors in the total investment volume in 2022.; investors from Canada (23%) and the US (15%) collectively pumped in nearly 37% of the capital. 
  • 43% share of domestic investors


  • Equity inflows in 2023 to remain steady; investors expected to remain cautious in the first half owing to recessionary fears in the US and Europe.
  • The year 2023 could see the listing of India’s first retail REIT, which would widen investment avenues for investors.
  • While a few large institutional investors with a strong presence in the office sector in India could diversify their portfolios by including I&L, retail and DCs, we could also see the entry of some new investors in the Indian RE landscape.
  • Partnership models could gain prominence to mitigate risk and navigate operational challenges, especially amidst external uncertainties.
  • Higher financing cost amidst elevated levels of policy rates due to sticky inflation could impact returns in the short-term.

Industrial & Logistics: Space take-up in 2022 almost touched the 2019 peak; supply addition picked up pace in Q4

  • Witnessed 31.6 mn sq.ft of total absorption in 2022; 8% growth in Y-o-Y leasing in 2022
  • 9.2 mn sq.ft absorption in Q4 2022 
  • Total supply addition in 2022 was 20.9 mn sq.ft; 7.2 mn sq.ft was witnessed in Q4 alone
  • 22% Y-o-Y growth in space take-up in Q4 2022
  • 59% cumulative share of Delhi-NCR, Mumbai and Bangalore in leasing activity in 2022
  • 62% total share of Mumbai, Kolkata, and Bangalore in space take-up in Q4 2022
  • Key sectors that drove leasing in Q4 2022 include 3PL (50%), engineering & manufacturing (15%), electronics & electricals (10%), e-commerce (8%) and retail (7%).
  • Regional share in leasing activity in Q4 2022: domestic corporates (67%), EMEA corporates (17%), APAC corporates (11%), and American corporates (6%)


  • Leasing is likely to remain range-bound in 2023, driven by sustained demand from 3PL, engineering &

manufacturing, and retail firms.

  • Supply is expected to exceed the 2022 levels and be in line with space take-up due to project completions by organised players.
  • Rental growth is likely to continue in certain core micro-markets driven by high-quality project completions and the supply-demand imbalance
  • Although relatively low on impact as compared to the past two years, supply chain pressures are expected to fluctuate in 2023; corporates are likely to continue to focus on deploying multi-sourcing strategies and nearshoring / friend-shoring of operations
  • Impact of policy measures such as the National Logistics Policy to reflect this year; the government is also anticipated to continue with its reformist stance with a special focus on port infrastructure

Office: Sector recorded highest leasing activity since the peak of 2019

  • Witnessed 56.6 mn sq. ft absorption in 2022 and 15.3 mn sq. ft in Q4; 40% Y-o-Y growth in leasing in 2022
  • 50.6 mn sq. ft. supply in 2022; 15 mn sq. ft. supply in Q4 2022
  • 26% Q-o-Q growth in space take-up in Q4 2022; nearly stable leasing activity on a Y-o-Y basis
  • 74% cumulative share of Bangalore, Delhi-NCR, Mumbai and Hyderabad in leasing activity in 2022
  • 73% total share of Bangalore, Delhi-NCR Hyderabad and Mumbai in space take-up in Q4 2022
  • 2% Y-o-Y jump in supply in 2022
  • Rental recovery continued across several cities due to sustained recovery in leasing, moderating vacancy levels and persistent demand for investment-grade assets
  • Key sectors that drove leasing in Q4 2022: technology (32%); flexible space operators (11%); engineering & manufacturing (10%); BFSI (9%); research, consulting & analytics (8%); life sciences (6%); and infrastructure, real estate & logistics (6%)
  • Regional share in leasing activity in Q4 2022: domestic corporates (51%), American corporates (37%), EMEA corporates (8%), and APAC corporates (4%)


  • Likelihood of economic slowdown in the new year in a few developed economies could hurt profitability especially in the technology sector. However, the full impact of these challenges on global corporates’ leasing decisions is yet undetermined.
  • India’s cost-effectiveness and abundance of talent could lead to normalization of leasing activity over the year, although it is expected to lag behind the 2022 peak. Consequently, the growth of new GCC setups and expansion of existing centers by global firms would persist in the medium to long term.
  • Development completions owing to a strong supply pipeline might be higher in 2023, causing vacancy rates to remain range-bound.
  • Workplace quality and experience as well as employee engagement to remain a focus area as the workforce looks to strike a balance between hybrid and fully remote work styles.
  • In order to ramp up their RTO plans, occupiers are likely to formulate relevant RTO and hybrid working policies, identify new work styles and gauge employees’ preferences through surveys.

Residential: 2022 ended on a strong note; with sales climbing to an all-time high and unit launches touching a decadal high

  • 295,000 units sold in 2022; 46% Y-o-Y growth in sales in 2022
  • 70,000 units sold in Q4 2022; 12% Y-o-Y growth in sales activity in Q4 2022
  • 300,000 units launched in 2022; 76,000 units launched in Q4 2022
  • 50% Y-o-Y rise in unit launches in 2022; 71% > Combined share of Mumbai, Hyderabad and Pune in unit launches in 2022
  • 72% > Cumulative share of Mumbai, Hyderabad and Pune in apartment launches in Q4 2022
  • 51% Share of mid-end category in number of units sold in 2022, followed by high-end projects
  • 62% Cumulative share of Pune, Mumbai and Delhi-NCR in sales in 2022
  • 63% > Total share of Pune, Mumbai and Hyderabad in sales activity in Q4 2022


  • Strong project pipeline amidst healthy demand and low unsold inventory levels could lead to a rise in capital values in select pockets, although the growth would be slower than that witnessed over the past year
  • Higher capital values could impact purchase decisions primarily in the budget to mid-end segments, amidst the almost 2 percentage points rise in home loan rates in the past few quarters
  • Projects with better amenities, focus on health and safety and clean surroundings to further gain an edge amidst evolving consumer preferences
  • Listed players, specifically tier-I developers, could continue to deleverage / strengthen their balance sheets through positive cash flow generation and fund-raising activity; more players are expected to list their companies on bourses