The Covid-19 pandemic hit the retail industry hard, forcing many brands to shut their stores during the lockdown period. However, after almost 3 years, the industry has started seeing green shoots of recovery. According to a CBRE report, India’s retail leasing is expected to cross the pre-Covid levels this year. The country is likely to see a 25% jump in new store openings in 2022 as compared to the previous year.
Retail brands are confident and are continuing with their store expansion plans which they had put on hold during the pandemic. There has been a strong recovery in March and brands are witnessing huge demand due to the wedding season or the opening up of offices and schools.
“Consumer behavioral patterns have evolved significantly since the pandemic, resulting in a strategic shift for the retail sector. After Covid-19 subdued, a robust economic recovery has resulted in stronger consumer and market sentiments, leading the retail sector’s growth to quickly return to the pre-COVID levels. Retail leasing throughout the cities has been fuelled by the influx of new businesses and the burgeoning demand from consumers. The growing momentum of retail leasing is expected to continue as a result of positive sentiments and the relaxation of COVID-19 restrictions,” said Shibu Philips, Business Head at LuLu Mall.
The UAE-based Lulu Group at present has four malls in India at Kochi, Thrissur, Trivandrum and Bangalore, and is gearing up to open its fifth mall in Lucknow in 2022.
“Malls and shopping complexes are witnessing increased footfalls. This has led to positive sentiments throughout the retail segment, resulting in retail leasing reaching the pre-Covid levels. Backed by a strong demand, we foresee the retail segment gaining further momentum from here onwards,” said Ravish Kapoor, Managing Director, Elan Group.
The CBRE report states that retailers are expected to lease 5.1 million sq. ft. of space in 2022, coming closer to the previous two years’ combined figure of 5.9 million sq ft. Also, the brick-and-mortar apparel retail market is expected to increase by 20-25% this fiscal.
Omaxe, for instance, has leased over one lakh sq. ft. of retail space in its high street project World Street located in Faridabad in 11 months of the fiscal year 2022. With more brands coming in, the outlook of leasing activity remains stronger for the coming quarters.
Jatin Goel, Director, Omaxe Ltd, said, “The traction across Grade A malls and hi-streets continues to flourish owing to the revived demand and new trends witnessed post-pandemic. The quick adaption and realignment of the sector to the evolving market landscape has helped strengthen the market sentiments. Over the last couple of quarters, the retail sector has witnessed a tremendous spike in leasing activity. This is quite an encouraging sign for the sector to move upward on the growth trajectory.”
This year would bring more relief to the industry. Brands or hypermarkets are targeting Tier 2&3 cities for expansion as the demand and behavior of the consumers have changed.
Abhishek Trehan, Executive Director, Trehan Iris, said, “The opening of the market and business activities gaining momentum reflect the regained consumer confidence. The industry is witnessing positive signs of an increase in retail rentals as sales are inching back to the pre-pandemic levels now. Backed by the growth trend, several deals that were deferred owing to the pandemic uncertainties are now making their way. The quick and robust recovery in the retail sector highlights the strong growth momentum for the coming quarter.”