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Emerging Tier- 2 Retail hotspots in South India

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The report from CBRE South Asia states that the total retail stock in 14 tier-2 cities stood at 29 mn. sq. ft. as of September 2023

New Delhi: Nearly 35 major domestic and international retail brands entered 14 tier-2 cities in the January to September 2023 period, according to a report by the real estate consulting firm CBRE South Asia Pvt. Ltd.

The report titled ‘Tier-II Cities: The Time to Shine’ shows that several domestic and international retail brands, including Croma, Armani Exchange, Malabar Gold & Diamonds, Reliance Smart, Tanishq, H&M, Marks & Spencer, GAP, Starbucks, Pizza Express, Under Armour, among others, have expanded their retail footprint to tier-2 cities in the said period.

The retail development in these cities has been a healthy mix of high streets and malls. The total retail supply recorded in the 14 cities has been around 2.4 mn. sq. ft. in the said period.

Top cities dominating supply addition during this period include Chandigarh, Jaipur and Lucknow. The total absorption across the 14 cities stood at 2.4 mn. sq. ft., led by Kochi, Jaipur, and Goa.

Major south indian retail hotspots, include Mangaluru, Kochi, Vizag, Mysore, and Coimbatore.

Speaking on the report, Anshuman Magazine, chairman & chief executive officer, India, Southeast Asia, Middle East & Africa, CBRE, said, “The e-commerce boom, tech-savvy consumer base, growing aspirations and surge in discretionary purchasing are defining the retail growth in tier-II cities.

IndiaRetailing had earlier reported that Retailers across diverse industries are identifying various factors for their expansion into South India.

Investment-grade developers are setting up large-sized contemporary malls in these cities, which are seen as an entertainment destination and not just as a place to shop.”

Tier 2 South cities shine

Kochi

Kochi is the second largest urban agglomeration in Kerala and a key commercial destination. With rapid urbanisation and a rising middle-class segment, Kochi’s population drives consumer demand, while infrastructure development has led to the establishment of various modern shopping malls and commercial centres.

Kochi was among the first cities to house one of the largest retail malls in India- Lulu Mall, paving the way for similar developments in other tier 2 cities.  The Kerala government also actively supports the retail sector through infrastructure development and tourism campaigns, creating a business-friendly environment for retailers.

  • Houses Lulu Mall, Prestige Forum Mall, Centre Square Mall, Oberon Mall, ABAD Bay Pride Mall, and Allapat Centre along with residential hubs and primary high street destinations.
  • The Marine Drive and Vytilla Bypass, also known as the IT Corridor of Kochi has a strong retail presence. It caters to key categories such as fashion & apparel, along with departmental stores
  • Key brands present are Tanishq, Kalyan Jewellers, Malabar Gold, Pothys, Westside, Marks & Spencer, Lulu Hypermarket, Reliance Digital, Starbucks, Zudio and many more

Coimbatore

The second largest city in Tamil Nadu is also known as the textile capital or Manchester of South India. Coimbatore contributes to 7% of the state’s GDP. Factors such as growing textile and manufacturing industries, rising urban population, educational institutions, and retail infrastructure have helped the city to establish itself as a prominent retail market in South India.

The Lulu Group has recently launched its flagship venture, Lulu Hypermarket, spanning an impressive 1.1 lakh sq. ft at the Lakshmi Hills Compound.

  • Houses Brookefields Mall, Prozone Mall, and Fun Republic Mall featuring several domestic and international brands
  • Highstreets such as RS Puram, Avinashi Road, Peelamedu, Cross Cut Road housing fashion& apparel and jewellery brands
  • Key brands include Manyavar, Biba, Lifestyle, Westside, Westside, H&M, Shoppers Stop Zudio, Reliance Trends, Reliance Digital
  • Upcoming supplies in the city include Lakshmi Mills- Phase II and Broadway Mall

Visakhapatnam

The oldest port city in the country, Visakhapatnam attracts a diverse population seeking quality shopping experiences, enriched by prominent educational institutions, a thriving residential hub and a picturesque tourism chain.

This creates a favourable environment for the entry of new-age retail brands, especially across fashion & apparel, F&B and entertainment categories. The upcoming Inorbit Mall by K Raheja is poised to become one of the largest malls by the developer in South India.

  • Houses CMR Central Mall (Maddilapalem) and CMR Central Mall (Gajuwaka) including domestic fashion, jewellery and electronics brands
  • Presence of prominent high streets, catering to leading domestic retailers
  • Key brands include Westside, Inox, Shoppers Stop, Tommy Hilfiger, Decathalon, Croma, Reliance Trends
  • Upcoming supplies in the city include Inorbit Mall, ASN Mega Mall and ARK Mall

Mysore

Mysore stands as the third-largest city in Karnataka, which is renowned for its magnificent heritage structures and palaces. With renowned companies such as Infosys, Wipro and L&T Infotech and emerging new residential pockets, serves as a major catalyst for the growth of Mysore’s retail market.

Furthermore, the city’s rich heritage in jewellery-making has positioned it as a prominent destination for renowned jewellery brands. Nexus City Centre contributes to the growth of the city’s tourism sector by providing a contemporary shopping and entertainment experience.

  • Houses Mall of Mysore, Nexus Centre City offers domestic brands and international brands across categories
  • Highstreets on URS Road, MG Road, and Kalidasa Road cater to a mix of F&B, fashion & apparel with the presence of retail banking
  • Key brands Reliance Trends, Mia, US Polo, Raymond, Bluestone

Mangalore

Mangalore stands as a significant industrial port city in Karnataka. A prominent exporter of spices, coffee and nuts; Mangalore is also known for its diverse range of traditional clothing, intricate jewellery and exquisite handicrafts.

It is the only city in Karnataka to have connectivity via all four modes of transport – air, road, rail and sea, facilitating the seamless movement of goods and commodities. With a flourishing tourism industry, including medical tourism, Mangalore experiences a positive ripple effect on its retail market.

  • Nexus Fiza Mall plays a significant role as a retail, entertainment and social hub for the city
  • Balmatta Road and MG Road are prime high street which caters to jewellery brands along with retail banking
  • Key brands include Reliance Smart, Malabar Gold & Diamonds, Bluestone, Tasva, R&B, Zudio
  • Upcoming supplies in the city include Lotus Mall

More insightful and stimulating conversations on trends in retail are expected at the Phygital Retail Convention (PRC) 2024.

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