Indian retail sector is one of the key contributor to Indias economy consisting of 18% of the total GDP. Correlated with the rapidly mounting retail sector, the retail realty sector is also surging very fast.
Mentioned below are some of the key trends that are dictating the market dynamics of the retail realty sector in India:
The Year on Year (Y-o-Y) growth of Indian retail industry is higher than the average GDP growth rate of the country- Roughly in the range of 12-15%.
The rise in retail activities have been driven by rise in income level, change in lifestyle coupled with surge in tourism inflow in the recent past. Not to mention Indias favorable demography, which is skewed towards a younger base.
NCR is the largest retail market in India with a total mall stock of 23 million Sq. Ft- According to the research conducted by JLL. The national capital still has numerous underserved areas that can ensure a great potential in the near future.
Mumbai is the biggest organized retail market in India with a total mall stock of 19 million Sq. Ft. The future prospect of Mumbais retail market appears to be robust on the backdrop rise in job market, which is influencing expansion of the cities across the peripheries. Expansion of the city will eventually translate into higher demand for retail, thereby further boosting the retail markets in the coming time.
After Mumbai and New Delhi, Bangalore, the silicon valley of India is the 3rd largest retail market of India with a mall stock of roughly 9 million Sq. Ft. The retail market in Bangalore is driven by a robust IT/ ITES sector of the city.
Like Bangalore, Pune is also a rapidly evolving retail market, thanks to a vibrant IT/ ITES and automobile sector. However, Punes retail market is highly heterogeneous with eastern part of Pune (Kharadi, Viman Nagar etc) having oversupply whereas the western part of the city still underserved. Being a rising IT market itself, the western parts has great potential for retail sector to grow and evolve.
Though having a small market compared to the cities mentioned above, Chennai is expanding its retail frontier by adding up new malls. The city is also witnessing rise in household income that will further add to its retail realty potential.
A range of Tier 2 & 3 cities such as Chandigarh, Lucknow, Amritsar, Jaipur, Coimbatore, Kanpur & Indore are touted as upcoming retail destinations on the backdrop of rise in population & annual income coupled with change in lifestyle preferences.
Image Source: Indian Real Estate for Dummies
