Track2Realty Exclusive: Analysis of South Zone (Bangalore)
Retail leasing activity in Bangalore remained active through 2012 due to the opening of a few malls particularly in the Whitefield micro-market. Apart from the stable leasing activity seen through the year, space enquiries from retailers during the period point to the fact that a number of them remained bullish on their medium to long term prospects due to the increasing affluence of the growing middle class.
With limited vacancy in operational malls and most of the space in the newly operational mall in the city having been pre-leased, the overall vacancy in the city stood at 2.7% at the end of Q3, much lower than the national average.
Recently, the clearing the decks for multi brand international retailers to enter Indian markets, with the relaxation of retail FDI policy by central government has provided a major boost to both retailers and developers. However, the final decision to implement the policy has been left on respective state governments.
As a result, though the overall sentiment in Mumbai and Delhi has improved owing to respective state governments adopting the new policy, however, with state of Karnataka opposed to entry of MNCs in multi brand retail, Bengaluru’s retail sector is unlikely to witness any immediate impact from this.
However, retail rental values are expected to firm up steadily over the next one year, in tandem with the expected pick-up in economic growth rates.
Best performing micro markets:
– Organised retail space in select projects in central, suburban continue to be amongst the best performing retail markets in the country. Meanwhile several malls in peripheral locations have also doing with the development of catchments in their vicinity, particularly in Whitefield and on Bannerghatta Road.
….to be continued
