Demand for Retail Space in India Surges

According to Los Angeles headquartered CBRE’s India Retail MarketView Report – H1, 2017, during the first 6 months of the year, there were 70 new entries/expansions by global and domestic brands across the cities of Mumbai, Delhi-NCR and Bangalore. Seven new global brands entered the country and investments into the segment by PE firms/wealth funds touched $200 million.

 Anshuman Magazine, chairman, India & South East Asia, CBRE said, “Our ranking on the 2017 Global Retail Index for developing countries as well as continued investment by private equity players is a demonstration of the sustained preference of international brands to set up, or expand their operations in India. With several legislation and policies in implementation mode, we are already seeing an increase in consumer and investor confidence. This will have a cascading effect on the retail segment. Overall, retail real estate will continue to grow and witness healthy demand across tier I and II cities.”

City Highlights

NCR

  • Approx. 200,000 square feet of fresh supply entered the market
  • Low vacancy levels led to select micro-markets in the city witnessing rental appreciation for prime retail developments

Mumbai

  • Leasing activity was driven by domestic F&B operators and foreign retailers from various segments
  • Over 1 million swuare feet of supply was added with opening of the  Seawoods Grand Central Mall
  • Rentals on Linking Road recorded a minor correction while rental values across other high streets and organized retail developments remained largely stable

Bangalore

  • Approximately 300,000 square feet of fresh retail supply entered the market
  • Rental values across high streets and shopping centers remained stable
  • In the coming quarters, sustained traction from both global and domestic brands may lead to rental appreciation in organized developments in the Central, Eastern and Western locations

CBRE says: Going forward, to effectively operate under the new GST regime, retailers will need to review their product pricing based on market expectations, align their supply chain and procurement strategy, rework their distribution channels, and ensure greater compliance to laws to be more cost-effective.

A Mall

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Posted on by Gunjan Bagla
Gunjan Bagla
California-based management consultant Gunjan Bagla runs Amritt, a consulting firm helping American companies to succeed in India. Amritt is the trusted advisor for India market research, India business development, India market entry, Global Engineering, Global Technology Scouting, India R&D and Open Innovation. Gunjan is author of "Business in 21st Century India: How to Profit Today from Tomorrow’s Most Exciting Market" (Hachette Book Group, 2008), Amazon's top rated title on the subject. He has appeared as the India Expert on BBC Television, Bloomberg TV, Fox Cable Business and has been quoted in the New York Times, the Los Angeles Times, the Hollywood Reporter and Business Week for his expertise on India.

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