Updated March 13th, 2024 at 13:59 IST

High streets' 100% YoY growth in luxury leasing wows retail market

High streets held the majority share, accounting for 45% of India's luxury retail leasing in 2023.

Reported by: Business Desk
Wave High Street Shop Condominiums | Image:Wave
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Luxury retail hub: High streets have emerged as the epicenter of luxury retail leasing in India, becoming the prime choice for luxury brands aiming to establish their presence in the country's top eight cities, according to a CBRE report.

These open marketplaces in prominent areas witnessed over 100 per cent year-on-year (YoY)  growth, with luxury brands leasing approximately 0.3 million square feet (sq ft) of space. Not far behind, malls maintained their allure, boasting a substantial 300 per cent YoY growth, accounting for 40 per cent of luxury retail leasing.

Prime street presence

According to the report, luxury brands' stores in high streets claimed a lion's share, constituting about 45 per cent of India's overall luxury retail leasing in 2023. This surge in leasing activity coincides with the entry and expansion of various international luxury fashion, watch, and jewelry brands across different locations.

The flagship experience remains a pivotal factor driving physical retail across all touchpoints, particularly for luxury brands. It offers a unique opportunity for brands to showcase their essence, values, and unique attributes, thereby engaging with customers on a deeper level.

Growth drivers identified

The rise in luxury retail leasing can be attributed to several factors, including the growing middle and upper class in India, coupled with rising disposable incomes and a desire for sophisticated lifestyles. The enduring influence of cultural heritage and the omnipresence of the internet and social media have further fueled awareness and demand for luxury goods among Indian consumers.

Furthermore, luxury brands are actively seeking expansion opportunities in metro cities and pursuing larger space take-ups to accommodate their growing offerings and cater to increasing demand. Affluent consumers from tier II cities are also contributing to this growth, often traveling to metro cities to fulfill their luxury shopping needs.

Key luxury locations

India's luxury retail sector is rapidly evolving, with Delhi-NCR emerging as a prominent hub, boasting nearly 80 per cent of international luxury brands. Mumbai and Bangalore also serve as key destinations, attracting luxury shoppers from neighboring regions. Hyderabad, with its growing affluent population, is witnessing a surge in demand for luxury brands, prompting prestigious labels to establish a presence in the city.

Anshuman Magazine, Chairman & CEO, CBRE, highlighted India's growing reputation as a sought-after tourist destination and its increasing international exposure, significantly influencing the demand for luxury retail. He expressed optimism for continued positive momentum in the luxury retail sector in the years ahead.

“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,” Magazine added.

In-store experience impact

Bimal Sharma, Executive Director & Head of Retail, CBRE India, emphasised the role of experiential in-store environment in the growth.

 “Luxury brands are revolutionising 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,” Sharma said.

As luxury brands continue to chase new avenues to attract both seasoned and aspiring luxury consumers, the Indian luxury retail sector is poised for further expansion.

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Published March 13th, 2024 at 13:59 IST