The shopping centre space witnessed a 75% year on year increase in supply at 3.6 million sq ft across seven key cities in the country during the second half of 2015 compared to the same period of 2014.
The shopping centre space witnessed a 75% year on year increase in supply at 3.6 million sq ft across seven key cities in the country during the second half of 2015 compared to the same period of 2014. The second half of 2015 saw the launch of long-awaited shopping centres including DLF Mall of India at Noida, Garden’s Galleria at Noida, Virtuous Retail’s VR Mall and ETA Namma Mall in Bengaluru and the Acropolis Mall in Polka.
According to the findings of CBRE’s latest report, “India Retail Market View” for H2, 2015, the retailer demand for store space also remained upbeat across various cities, with prominent global players such as Juicy Couture, Apostrophe, and Carl’s Jr, making inroads into the country. Others such as TM Lewis, Johnny Rockets, Fernando’s and Burger King continued to expand their retail operations in India.
“As global brands pursue their India entry plans and domestic players continue to expand across the country, the retail real estate market in India will be keenly dependent on a more open Foreign Direct Investment (FDI) policy regime. While challenges still exist, specifically for FDI in multi-brand retail, 2016 is expected to be a buoyant year for the retail market,” Anshuman Magazine, Chairman and Managing Director of CBRE, South Asia Pvt Ltd said.
The timely delivery of quality shopping space by developers will also be crucial for the sector to reach its potential of becoming a leading retail market in the geography, he said.
Of the leading seven cities, Delhi National Capital Region (NCR) remained the most preferred point of entry for brands coming to India during the year. In response to this sustained demand from retailers for launching outlets in the region, the majority of new shopping centre space during H2, 2015 was concentrated in Delhi NCR as well.
The period also saw Food and Beverage (F&B) brands continue to enter and expand across Indian marketplaces. With a growing appetite for newer concepts and cuisines among Indian consumers, along with the arrival of F&B-centric developments, the segment saw heightened activity in 2015. Established players such as Burger King, Dunkin Donuts, Starbucks, and Nando’s undertook expansion during the year. Local players also continued to expand their restaurant chains with the likes of Soda Bottle Openerwala, Farzi Cafe, Mamagoto, Paradise Biryani and Chaayos opening multiple outlets across major cities.
Rental trends, meanwhile, displayed mixed signals across cities during the second half of the year. High street markets — such as Connaught Place (Delhi), Kammanahalli (Bengaluru), 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 Bengaluru and Kolkata noted stable rentals, the CBRE report said.