India witnessed increased transaction activity and retailer expansion in H1, 2012. Leading brands and retailers pursued expansion plans aggressively, increasing their presence across key retail hubs. In all the seven cities presented in the review, the retail real estate market appears to be promising with an increase in retailer enquiries. These are the findings of CBRE’s latest report titled “India Retail Market view.”
Retail mall rentals witnessed growth in prime city micro markets of Delhi, while values in high streets increased in Mumbai, Bangalore and Pune. The same can be attributed to the heightened interest by retailers coupled with a low base of supply addition as developers continue to focus on attracting tenants in completed products and reducing current vacancy rather than launching new projects.
About 1.12 million sq ft of mall supply was added in H1 2012 (concentrated largely in Bangalore), which was less than 20% of almost 6 million sq ft of space added during the same period last year.
Commenting on the findings of the report, Mr. Anshuman Magazine, Chairman and Managing Director of CBRE, South Asia Pvt. Ltd said, “The rising level of activity in retail space across key cities is testimony to the growing confidence of domestic and international retailers in India. Retailers are looking to expand their operations beyond the top three cities to include the likes of Hyderabad, Chennai, Kolkata and Pune and Chandigarh due to growing urbanisation and an increase in the acceptance of organised retail.”
Going ahead, transaction activity and size are expected to increase on the back of higher consumer spending and expanding mid-income purchasing power. The anticipated changes in the FDI regime should propel the demand for organised retail space further.
