January 16, 2024: Nearly 35 major domestic and international retail brands entered 14 Tier-II cities in the January-September period of 2023, says a report by global property brokerage firm CBRE. According to the findings of the report, Tier-II Cities: The Time to Shine, these 14 cities include Chandigarh, Jaipur, Indore, Goa, Mangalore, Kochi, Lucknow, Patna, Ranchi, Guwahati, Bhubaneshwar, Vizag, Mysore and Coimbatore.
Among the domestic and international retail brands that have entered these cities are Croma, Armani Exchange, Malabar Gold & Diamonds, Reliance Smart, Tanishq, H&M, Marks & Spencer, GAP, Starbucks, Pizza Express, Under Armour, etc.
According to the report, the total retail stock in these 14 tier-II cities stood at 29 million square foot (msf) as of September 2023, with Jaipur, Lucknow, and Chandigarh each boasting retail stock ranging between 3 to 7 msf. The retail development in these cities has been a healthy mix of high streets and malls. The total retail supply recorded in these 14 cities has been over 2.4 msf during the period under assessment. Top cities dominating supply addition during this period include Chandigarh, Jaipur and Lucknow. The total absorption across the 14 cities stood at 2.4 msf in the 9-month period, led by Kochi, Jaipur and Goa.
Anshuman Magazine, chairman & CEO, 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. 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. Most non-metro cities are established trade and business hubs and are now witnessing multinational corporations and start-ups setting up offices as well. Growing population in tier-II cities are further propelling demand for a diverse range of retail offerings.”
Ram Chandnani, managing director, advisory & transactions services, CBRE India, said, “Tier-II cities have recorded a massive surge in retail developments over the last three years. India’s first retail REIT has encouraged developers to aggregate and upgrade their existing facilities, apart from developing new malls. Moreover, domestic and international fashion brands are looking to expand in non-metro cities, fueled by a well-aware and well-travelled consumer set.”
Top retail markets in Tier-II cities
Chandigarh
Owing to the presence of an affluent consumer base, well-planned infrastructure, economic growth, tourism, and the presence of domestic and international retail brands, Chandigarh has grown to become a prominent retail market in Punjab. Chandigarh, alongside its sister cities – Mohali, Panchkula, and Zirakpur, has emerged as a prominent retail destination, offering a thriving market for growth and development.
Retail space absorption: Around 0.25 msf
Supply: 0.4 msf
Leading mall: Nexus Elante Mall
Key micro-markets: Sector 17 and 35, Phase 3B – 2, Sector 82, Sector 70, Phase -7 in Mohali, Sectors 8, 9, & 20 in Panchkula. The Ambala – Chandigarh Expressway, VIP Road in Zirakpur, Cosmo Mall, Dhillon Plaza
Key brands: Zara, Uniqlo, Lifestyle, Shoppers Stop, Marks & Spencer, The Collective, Nike, Adidas, Skechers, Puma, Frontier Raas, Taco Bell, Ritu Kumar
Upcoming developments: HLP Galleria, Jubliee Junction, Central Street, Mohali Citi Center
Jaipur: Lower operating costs, a good talent pool, and proximity to Delhi-NCR have led to Jaipur becoming a prominent business hub. The city also houses an international airport and an air cargo complex, making it a reliable destination for facilitating exports.
Retail space absorption during Jan-Sep’23 stood at nearly ~0.5mn. sq. ft., supply stood at ~0.3 mn. sq. ft.
Key retail micro markets in Jaipur include Malviya Nagar, C-Scheme, M.I. Road and Vaishali Nagar.
Key brands present in the city include Zara, Lifestyle, Shoppers Stop, Marks & Spencer, Starbucks, Mango, Adidas, FabIndia, Croma among others
Key malls in the city are World Trade Park Mall, Mall of Jaipur and GT General
Upcoming supply in the city will be in Pacific Mall and Pink Walk
Lucknow
The Lucknow retail real estate market is witnessing robust growth driven by several factors, such as rapid urbanization and a growing middle class, increasing consumer spending, the emergence of new shopping malls and high-street retail formats and expansion of domestic and international retail brands.
Retail space absorption: Over 0.05 msf
Supply: 0.2 msf
Key retail micro markets: Gomti Nagar, Hazratganj and Ashiyana & Alambagh along with Aliganj
Key brands: Lifestyle, Westside, Marks & Spencer, Max, Pantaloons, Skechers, Nike, Croma
Upcoming developments: Summit Twin Tower, Rishita City Centre, Shalimar Lakeside
Indore
Located in the heart of Madhya Pradesh, Indore stands as a prominent commercial and financial hub in central India. A thriving residential sector and a bustling trade market have created a favourable ecosystem for the city’s retail sector in recent years. Firstly, the city’s burgeoning economy, driven by a growing population and rising incomes, creates a strong consumer base eager to explore diverse shopping experiences. Secondly, the retail landscape strikes a balance between traditional markets and modern retail spaces, catering to a wide spectrum of preferences and budgets, cementing its reputation as a thriving shopping destination in central India.
Retail space absorption: Over 0.3 msf
Supply: Less than 0.1 msg.
Key retail micro-markets: AB Road, Central Indore, Sapna Sangeeta and East Indore
Key brands: Westside, Pantaloons, The White Crow, BlueStone, Tanishq, Tasva, Farzi Café, H&M, Fabindia, Starbucks, Croma, Zudio, Inox, Hamleys, More.
Goa
A renowned tourist destination, Goa provides a steady influx of customers year-round, bolstering retail businesses. In addition to fashion, apparel, homeware, and department store brands, Goa is a vibrant hub for the F&B industry. The region is renowned for its diverse culinary scene, featuring numerous fine dining restaurants that cater to both international and local cuisine.
Retail space absorption during the assessment period: Over 0.4 msf
Supply: Over 0.3 msf
Key retail micro-markets: Panjim, Margao and Mall De Goa
Key brands: Levi’s, Puma, Adidas, Skechers, Nike, Orra, Vero Moda, Only
Upcoming supply: DLF Mall in Panjim.
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An alumna of the Indian Institute of Mass Communication, Dhenkanal, Sunita Mishra brings over 16 years of expertise to the fields of legal matters, financial insights, and property market trends. Recognised for her ability to elucidate complex topics, her articles serve as a go-to resource for home buyers navigating intricate subjects. Through her extensive career, she has been associated with esteemed organisations like the Financial Express, Hindustan Times, Network18, All India Radio, and Business Standard.
In addition to her professional accomplishments, Sunita holds an MA degree in Sanskrit, with a specialisation in Indian Philosophy, from Delhi University. Outside of her work schedule, she likes to unwind by practising Yoga, and pursues her passion for travel.
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