"Though 2009 started on a discouraging note for the retail sector, from third quarter onwards, some movement did take place...For 2010 we hope to see a positive trend in consumer spending," CBRE Chairman and MD South Asia Anshuman Magazine said, while issuing a report 'The India Retail Market View-Second Half, 2009'.
He, however, cautioned that the sector will still take some time to fully recover.
"This (full recovery) will depend on a number of factors, including economic growth and improvement in domestic consumption, consumer sentiment, availability of retail space at competitive costs and so on," Magazine said.
The economic downturn hurt the Indian retail sector badly forcing big retail players like Subhiksha and Vishal Retail to go for debt restructuring after being plagued by huge loans and liquidity crunch.
The report said, while retailers have adjusted their expansion plans to suit current market conditions and rationalised their portfolio, no major retailers have had to downsize significantly during the second half of 2009.
On the rental side, the CBRE report said major metros like Delhi NCR and Mumbai witnessed corrections of up to 15 per cent during the second half of 2009, with retailers showing signs of scaling up expansion.
"We also expect the new trend of power-sharing between the landlords and tenants to become balanced at a point, which enables both sides to work together to ensure that shopping centres and high street locations succeed," it said, regarding the outcome for 2010.
Rentals in Delhi NCR corrected by 10-15 per cent during the second half of 2009 with prime retail spaces continuing to be in demand, with activity remaining centered around South and Central Delhi.
"In addition, an increasing number of retailers and developers are taking the minimum guarantee and revenue share route to partner each other's success," CBRE said.
The other major metro market, Mumbai, witnessed an increase in mall leasing activity across most micro markets from the end of second quarter of 2009 resulting in stabilisation of average mall rentals across most markets.
"Retailers have also shown signs of recovery by returning to the drawing board with new expansion plans amidst overall improvement in the economy," the report said.