Property consultant CBRE on Tuesday said the supply of retail space rose 27 percent during January-June period this year in seven major cities to cater the rising demand from domestic and foreign retailers.
In its latest report titled ‘India Retail Market View’, CBRE said the new supply of retail space increased to 1.9 million sq ft in the first half of 2018 as against 1.5 million sq ft in the same period last year.
The fresh supply came in Chennai, Hyderabad and Delhi-NCR. During the reported period, Chennai witnessed the launch of VR Mall (1 million sq ft), L&T Hyderabad Next and L&T Next Galleria (totalling 0.65 million sq ft) in Hyderabad, and 32nd Avenue (0.25 million sq ft) in Gurgaon.
In January-June 2017, Mumbai saw a supply of one million sq ft, Bengaluru (0.3 million sq ft) and NCR (O.2 million sq ft). Global brands such as Dyson, Molton Brown, Berluti, American Eagle, Antony Morato, Daniel Wellington and Bath & Body Works entered India with their first stores becoming operational during this period.
“The overall outlook for the Indian retail real estate market continues to be positive at the back of various policy reforms, entry of foreign players and increasing urbanisation,” said Anshuman Magazine, Chairman, India & South East Asia, CBRE.
He said around 4–5 million sq ft of additional supply could be added during second half of 2018 across most major cities.
“With REITs in the offing, the focus on developing investment grade developments is likely to redefine the retail segment in India,” he added.
On rentals, CBRE said trends varied across key high streets in major cities during January-June 2018. Rentals appreciated in high-street markets such as Khan Market, DLF Galleria (NCR), Linking Road (Mumbai), MG Road and Aundh (Pune). Some high street locations in Bengaluru and Hyderabad also saw increase in rents.
On the other hand, rentals remained stable in most of the other high-streets across the country. Rentals across organised retail developments also displayed a varied trend – mall rentals remained stable in Hyderabad, Mumbai, Pune and Kolkata but increased in Bengaluru, Chennai and NCR.