Anshul Jain, CEO, DTZ India
Retail Segment: New entrants and continued urbanization to stimulate growth
The much anticipated opening up of Foreign Direct Investment (FDI) in multi-brand retail has renewed interest of several large international retailers in Indian retail market. When implemented, the policy will not only allow major global retailers like Wal-Mart, Carrefour and Tesco to open retail stores in major Tier I and Tier II cities but also aid in creating supporting infrastructure like logistics, warehouses, cold storages, etc.
Over the next 12 to 24 months, the retail sector in the country will continue to witness steady performance. This can be aligned to a vast market for domestic consumption coupled with increasing per capita income, surge in consumer spending and development of an enabling environment (emergence of international standard malls and logistic infrastructure). Even as a few retailers are being cautious in executing their expansion plans, on a long term horizon, most retailers are bullish about positive market sentiments in 2012 and thereafter. The new international standard malls, some of which are still under construction, have registered high occupancy/pre-commitment levels. This further reinforces the latent potential of the sector. To grab their share of this growing market, several retailers (both Indian and International brands) are expanding their foot prints across the country.
While growth in organized retail is likely to be centered across established major Tier I cities, high GDP levels and evolving real estate markets in some Tier II and Tier III cities will also provide significant opportunity to the retail sector in 2012 and thereafter. As a result, in addition to Mumbai, Delhi-NCR and Bangalore, which are amongst the most populous cities in the country with highest GDP level, some other cities will also witness retail leasing in the country.
