Year 2018 was a mixed bag of highs and lows for the Indian retail real estate sector. The initial pangs of policy alterations seemed to fade away with each region seeing visible signs of recovery across segments. Even as the liquidity crunch and stalled/ delayed projects continue to plague the sector, the main southern cities of Bangalore, Chennai and Hyderabad actually saw faster growth momentum than their northern counterpart NCR.
Retail real estate saw a lot more activity in Southern cities than in the North.
Fresh supply of malls across the top 7 cities was limited in 2018. However, the further liberalization of FDI policies repositioned Indian retail on the global investment map and attracted a large number of global retailers into the country.
ANAROCK data indicates that the three primary southern cities together accounted for more than 90 percent of the overall new mall supply in 2018, leaving their western and northern counterparts far behind. Among the southern cities, Hyderabad led in terms of new mall supply, followed by Chennai and Bangalore.
All in all, the southern cities had a very clear edge across sectors in real estate activity in 2018. Their inherent advantage stems from the more professional and organized approach to real estate – not just post RERA implementation but also in the pre-RERA years.
Genuine end-users have helped steer consistent housing growth in these cities, in contrast to markets in the north where speculative pricing coupled with questionable activities of some developers dampened sentiment.
During all the ups and downs that the Indian real estate market has witnessed in recent years, the southern cities have displayed remarkable strength and resilience even in the worst phases.