On the supply side, close to 2 million sq. ft. of new supply entered the market during the second half of 2017 and majority of this was concentrated in Kolkata, Delhi National Capital Region (NCR), Chennai, Pune and Bangalore.
Retail assets in the country witnessed investments of over $800 million from private equity and wealth funds in 2017; a 15% increase over 2016. The steady capital inflow highlights the continued growth of the retail sector in India, showed a CBRE South Asia report.
On the supply side, close to 2 million sq. ft. of new supply entered the market during the second half of 2017 and majority of this was concentrated in Kolkata, Delhi National Capital Region (NCR), Chennai, Pune and Bangalore. While close to 3.4 million sq ft of supply entered the market, 15 new brands established their presence in the country during the year.
Between July and Dec 2017, demand for retail space remained strong, as international brands such as Tom Tailor, Miniso, Simon Carter, and Jo Malone opened their first outlets in the country. At the same time, other well-known brands including Starbucks, H&M, Mango, Westside, Pantaloons, and Hamleys continued to expand operations.
Madame Tussauds also made its debut in the country with its first museum opening in Connaught place, Delhi in October 2017. Swedish home furnishing brand IKEA opened an experience center, Hej Homes, in Hyderabad during the second half of 2017.
“The government’s continued focus towards making India a preferred investment destination is having a positive impact on the country’s economy as well as the retail landscape,” said Anshuman Magazine, Chairman, India & South East Asia, CBRE.
According to him, the recent announcement allowing 100% FDI in Single Brand Retail Trading under the automatic route is likely to further ease the entry of global retailers. Competitive rentals, availability of quality space, and with more brands coming in driven by a growing consumer base, the sector can expect significant growth in times to come.
A notable trend witnessed during the year was the adoption of omni-channel strategies by established players. Several e-commerce retailers such as Urban Ladder, Craftsvilla, Myntra, Jaypore, Pepperyfry and Nykaa opened their brick-and-mortar stores; whereas established retailers such as Zara launching their online portals.
“Thanks to increasing globalization, demand for international brands continues to influence the retail story in the country. Going forward, increasing investments coupled with availability of quality space in both tier 1 and tier 2 cities will propel the market,” said Vivek Kaul, Head, Retail Services, India for CBRE South Asia.
During the first half of 2018, CBRE expects quality supply to enter the market, led by the southern cities of Hyderabad and Bangalore. Both domestic and international retailers continue to lead the expansion across fashion and F&B categories. Despite a strong supply pipeline, demand for quality retail space will continue to exceed the supply in most leading markets.
Source: The Economic Times