Prime retail supply in India rises 75% in 2015

29 Jan '16

4 min read

Rental trends, meanwhile, displayed mixed signals across cities during the second half of the year. High street markets - such as Connaught Place (Delhi), Kammanahalli (Bangalore), Alwarpet and Anna Nagar (Chennai) - saw a rise in store rentals; while most others noted stable rents, with Banjara Hills and Jubilee Hills (Hyderabad) experiencing a slight dip. Mall clusters in prime markets such as those of South Delhi, Noida and Gurgaon in the NCR; and Central Mumbai and the Western Suburbs in Mumbai saw a hike in rents as international brands preferred such prime shopping areas. On the other hand, retail malls in the suburban markets of Bangalore and Kolkata noted stable rentals.

According to the CBRE report, 2016 is expected to be a buoyant year for the retail real estate market in India. With international anchor tenants increasingly willing to explore big-box formats in shopping centers as well as customized, smaller store formats on high streets, demand from global brands is expected to drive organized retail space absorption in 2016. With premium developments focused on luxury retail planned in Delhi (Chanakyapuri) and Mumbai (Bandra–Kurla Complex), the luxury segment is also expected to bounce back stronger. In fact, the demand for retail space will most likely exceed supply, and exert further pressure on rentals for major high streets as well as investment-grade shopping centers.

As global brands pursue their India entry plans and domestic players continue to expand their footprints, the retail real estate market in India will be dependent on a more open FDI policy regime, and the timely delivery of quality space by developers, to be able to reach its optimum potential of becoming a leading retail market in Asia, the report said. (SH)

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