KARNATAKA: According to the findings of CBRE’s latest report, India Retail Market View H2 2013, the total mall supply stood at approximately 4.7 million sq ft in 2013. The demand from international and domestic brands as well as retailers, continued to strengthen throughout 2013, with the second half of the year witnessing an increase in demand for quality retail space, in Delhi-NCR, Pune and Chennai.
The demand from global retailers in the Delhi-NCR and Mumbai markets, remained buoyant, as more retail groups sought space in prime shopping centres, as opposed to standalone high street outlets, says the report. The total organised retail supply in 2013, stood at approximately 4.7 million sq ft, witnessing a strong year-on-year growth of about 78 per cent, over the total mall supply of 2.5 million sq ft in 2012. Most of the supply in 2013, was concentrated across tier-II cities. However, 2014 is likely to witness supply addition in the key hubs of NCR and Mumbai.
Commenting on the findings of the report, Anshuman Magazine, chairman and managing director, CBRE, South Asia Pvt Ltd, says, “Despite the ongoing uncertainty, retail Real Estate witnessed good activity during 2013, with a number of international brands entering and expanding, across key cities. The year 2014, is expected to remain positive for the retail sector, with existing brands expected to ramp up operations and new brands looking to make their India entries. Although domestic retailers have been performing steadily, they face competition from global retail groups, especially in the apparel and F&B segments.”
Prominent global players, such as Starbucks, Krispy Kreme, Dunkin Donuts, Forever 21, Zara and Superdry, expanded their presence across the country’s leading cities, while retailers in the luxury and bridge-to-luxury segments, were particularly active, with brands such as Brook Brothers, Missoni, Michael Kors and Emilo Pucci, making inroads into the country’s market places. Rental values displayed mixed trends across the top cities during H2 2013. While traditional high street markets, such as Khan Market (Delhi) and Brigade Road, Commercial Street (Bengaluru), witnessed an increase in rental values.
The shopping hubs of eastern Mumbai and south Bangalore, observed a rental decline in H2 2013 compared to first half of the year. Cities such as Hyderabad, Chennai and Kolkata, largely witnessed stability in pricing across most micro-markets; while Pune saw an increase across its high-streets, even as its mall rentals remained stable. Going forward, the limited availability of quality retail space in core locations is likely to pose a greater barrier to new retailer entry in a number of key markets, including Delhi-NCR, Mumbai and Bangalore, as opposed to prohibitive rentals. On account of such constraints in quality supply, select developments are likely to witness greater than average increments in rentals because of retailer preferences for such spaces.