Pune real estate is poised for growth both in residential and retail segment. While the demand-supply gap indicates that residential prices may go up, the retail segment of the city is also showing strong signs of revival. Major players are planning to expand the market responding to consumer aspirations post-recessions.
The observation comes against the backdrop of cancellation of plans of some major retail chains to expand in Pune market and a resultant fall in the rentals for retail spaces in the city in the last three years or so.
Real estate consultancy firm CB Richard Ellis (CBRE) has said in its ‘India Retail Market View – First Half 2011’ that Pune is among the markets that have witnessed most the expansion activity in the year. The other markets which have seen expansion in retail are National Capital Region Delhi, Bangalore, Mumbai and Chennai, the CBRE said.
The city has seen the operationalisation (though partial) of two very large-size retail malls in the year so far and a couple of them may open their doors to customers in the latter part of the year or early next year. Modern retail major Future Group has opened the first phase of its 1.1 million sq ft Amanora Town Centre with the promise of making it a day destination with diverse options for shopping, food and entertainment.
Earlier, the 3 million sq ft Phoenix Market City announced its inauguration and at least two more, including the Plaza Centre, are in the finishing stages. Retail players attribute the trend to the rising aspirations and disposable incomes of the county’s young.
Future Group Chief Executive Officer Kishore Biyani says the modern retail segment always thrives on young hopefuls who migrate to urban centres. “Pune is a classic example of this as it has become a hub for education, IT, automobile and many other businesses. Rising incomes and aspirations make the city an ideal place for retail expansion,” Biyani said. Future Group is thus expanding its department store format Central as well as its Big Bazaar chain, both of which are extremely successful in the city, he said.
The CBRE said rental values in Pune will continue to appreciate in leading high street destinations, as a sustained preference is being witnessed amongst leading brands for prime city locations. However, significant supply, specifically along the Eastern Corridor, might result into downward pressures on rental values, it said.
The report, however, underlined that pre-commitments in under construction retail space in prime locations is also an encouraging sign that rental flexibility, along with the minimum guarantee and coupled with revenue share model has become more acceptable in the industry.
