Slow sales hinder expansion of established brands in India

New market entrants and emerging local brands are leading leasing activity.

India’s retail market remains buoyant as established brands express interest in expanding their presence. However, slower retail sales and constrained supply are limiting their ability to do so, according to CBRE.

The report said that the leasing activity is being driven by new entrants and local brands, which are expanding quickly and pushing up rents in shopping malls and high streets.

The food and beverage (F&B) sector is at the forefront of demand, continuing to expand steadily across the country and across various categories. 

Entertainment retailers are also seeing strong performance, benefiting from consumers’ increasing willingness to spend on experiences. 

Meanwhile, domestic value fashion retailers are showing solid demand for space, particularly along high streets in major metropolitan areas. 

Department stores, however, have experienced subdued leasing activity, though no significant downsizing or closures have been observed.

To meet high demand, some developers are reducing store unit sizes and converting open areas into retail spaces. Incentives and fit-out allowances remain rare, as developers capitalise on robust demand. Retailers are conducting their own market research to inform store network strategies.

With the festive season now in full swing, retail sales are expected to pick up, further boosting demand. The strong leasing activity may push landlords to prioritise higher rents over tenant quality as they look to capitalise on the market’s momentum.