Supply of India’s retail space up 27 pc in January-June to meet retailers’ demand
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Property consultant CBRE on Tuesday said the supply of retail space rose 27 percent during January-June period this year in seven major cities to cater the rising demand from domestic and foreign retailers.
In its latest report titled ‘India Retail Market View’, CBRE said the new supply of retail space increased to 1.9 million sq ft in the first half of 2018 as against 1.5 million sq ft in the same period last year.
The fresh supply came in Chennai, Hyderabad and Delhi-NCR. During the reported period, Chennai witnessed the launch of VR Mall (1 million sq ft), L&T Hyderabad Next and L&T Next Galleria (totalling 0.65 million sq ft) in Hyderabad, and 32nd Avenue (0.25 million sq ft) in Gurgaon.
In January-June 2017, Mumbai saw a supply of one million sq ft, Bengaluru (0.3 million sq ft) and NCR (O.2 million sq ft). Global brands such as Dyson, Molton Brown, Berluti, American Eagle, Antony Morato, Daniel Wellington and Bath & Body Works entered India with their first stores becoming operational during this period.
International brands such as Tom Tailor, Miniso, Taco Bell, Mango, Marks and Spencer, H&M and Starbucks continued to expand operations by entering new markets across the country.
“The overall outlook for the Indian retail real estate market continues to be positive at the back of various policy reforms, entry of foreign players and increasing urbanisation,” said Anshuman Magazine, Chairman, India & South East Asia, CBRE.
He said around 4–5 million sq ft of additional supply could be added during second half of 2018 across most major cities.
“With REITs in the offing, the focus on developing investment grade developments is likely to redefine the retail segment in India,” he added.
On rentals, CBRE said trends varied across key high streets in major cities during January-June 2018. Rentals appreciated in high-street markets such as Khan Market, DLF Galleria (NCR), Linking Road (Mumbai), MG Road and Aundh (Pune). Some high street locations in Bengaluru and Hyderabad also saw increase in rents.
On the other hand, rentals remained stable in most of the other high-streets across the country. Rentals across organised retail developments also displayed a varied trend – mall rentals remained stable in Hyderabad, Mumbai, Pune and Kolkata but increased in Bengaluru, Chennai and NCR.
Questions & Answers
Q.Which specific cities received new retail space supply in the first half of this year?
Which specific cities received new retail space supply in the first half of this year?
The fresh supply of retail space during the January-June period this year came in Chennai, Hyderabad, and Delhi-NCR. Chennai saw the VR Mall launch, while Hyderabad received L&T Hyderabad Next and L&T Next Galleria.
Q.What is the forecast for additional retail space supply in the latter half of this year?
What is the forecast for additional retail space supply in the latter half of this year?
CBRE predicts that approximately 4 to 5 million square feet of additional retail supply could be added during the second half of 2018. This expansion is expected across most major cities in India.
Q.Which international brands opened their first stores in India during this reporting period?
Which international brands opened their first stores in India during this reporting period?
Global brands such as Dyson, Molton Brown, Berluti, American Eagle, Antony Morato, Daniel Wellington, and Bath & Body Works entered India. Their first stores became operational within the first half of the year.
Q.How did retail rentals change in major cities during January-June 2018?
How did retail rentals change in major cities during January-June 2018?
Rentals appreciated in certain high-street markets like Khan Market and Linking Road, and in malls in Bengaluru, Chennai, and NCR. However, they remained stable in many other high streets and in malls in Hyderabad, Mumbai, Pune, and Kolkata.
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