MUMBAI: Despite the slowdown, malls are mushrooming in different parts of the country especially smaller cities. The total organised retail supply in 2013 stood at approximately 4.7 million sq. ft., a year on year growth of about 78%, over the total mall supply of 2.5 million sq. ft. in 2012, said a report by international real estate consultants CBRE.
If supply took off, demand was also not far behind, the report claims. It stated that demand from international and domestic brands as well as retailers continued to strengthen throughout 2013. The second half of 2013 saw Delhi NCR, Chennai and Pune see “buoyant demand” as retailers chose prime shopping centres over standalone high street shops, the report added.
On the supply front there is a caveat. Most of the supply in 2013 was in Tier II cities. CBRE, however, expects 2014 will see significant supply in the key hubs of Delhi NCR and Mumbai.
Commenting on the trends in the retail market, chairman and managing director of CBRE, South Asia Anshuman Magazine said, “Despite 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 look to making their India entries. Although domestic retailers have been performing steadily, they face competition from global retail groups, especially in the apparel and food and beverages segments,” he added.
Among the global players who are opening up outlets across the country’s top cities are Starbucks, Krispy Kreme, Dunkin Donuts, Forever 21, Zara and Superdry. There was some action in the luxury and bridge brands segments with Brook Brothers, Missoni, Michael Kors and Emilo Pucci setting up shop in the sub-continent.
Rental values, however, performed differently across markets. The report noted that while Khan Market (Delhi) and Brigade Road, Commercial Street (Bangalore) witnessed an increase in rental values, the shopping hubs of Eastern Mumbai and South Bangalore observed a rental decline in second half of 2013 compared to first half of the year. Cities such as Hyderabad, Chennai and Kolkata largely witnessed stability in pricing across most micro-markets, it added.