Non-metros set to witness much of the action, too, while metro lease rentals begin a canter.
Retail chains across the country are signing up for space in a big way, after a long pause that had followed the economic downturn.
For instance, the Future Group, Shoppers Stop and Reliance Retail together picked up more than 10 million sq ft of retail space recently, according to Rituraj Verma, national director, retail agency, Knight Frank India. These were all long-term lease deals.
Another real estate advisor, DTZ, says “to grab their share of the Indian market, several retailers, both Indian and international brands, are expanding their footprints across the country”. DTZ has cited market information to say nine chains have planned to open at least 200 retail outlets across the country between 2011 and 2014.
|Marks & Spencer||10|
|*Number of outlets in pipeline
These chains include Shoppers Stop proposing 24 new outlets, Lifestyle 25, Pantaloons 55, the Bharti Group 20, Tanishq 15, Marks & Spencer 10, McDonalds 30, Hamleys 20 and Mango, six. In the first two quarters of 2011, large-format retail chains such as Pantaloons, Reliance Trendz and Marks & Spencer were among a few top names to occupy large retail spaces, said Jaideep Wahi, director, retail agency, Cushman & Wakefield, India.
While Pantaloons occupied 20,000 sq ft at Delhi’s South Extension during the first quarter and 35,000 sq ft on SG Highway in Ahmedabad during the second quarter, Reliance Trendz took up 12,000 sq ft at Jubilee Hills, Hyderabad, and 21,000 sq ft at Kamanahalli in Bangalore during the first quarter, Wahi elaborated. In addition, lifestyle brands such as Levis, Nautika, Peter England, Vero Moda, Bata, Catwalk and Hush Puppies have been on an aggressive spree to pick up space in major cities, according to Cushman & Wakefield. In the catering services segment, Café Coffee Day, Domino’s and US Pizza were on an expansion drive.
The action is all over the country, including in tier-2 and tier-3 markets. About 70 per cent of new mall space will come up in the non-metros, says Verma of Knight Frank. The non-metros witnessing significant growth are Jaipur, Kolhapur, Lucknow, Guwahati, Mangalore, Coimbatore, Amritsar, Ludhiana, Indore, Srinagar and Belgaum, he said.
Hyderabad, Pune, Kolkata, Chandigarh and Ahmedabad are among major cities likely to witness renewed momentum in retail leasing activity, according to DTZ. Additionally, Surat, Nagpur, Jalandhar and Coimbatore have potential to emerge as significant retail hubs in the future, it said.
According to Cushman & Wakefield Research, Bangalore is likely to witness the highest cumulative demand for mall space at 7.7 million sq ft by 2014, followed by Mumbai at 6.5 million sq ft.
In a recent report, real estate consultancy firm CB Richard Ellis, showed an upward movement of retail outlets and mall rentals, in the range of 10 to 20 per cent in some key cities of India. According to CB Richard Ellis South Asia chairman and managing director Anshuman Magazine, with the possibility of the government allowing 51 per cent foreign direct investment in multi-brand retail, the Indian economy will attract more international attention and investment in the future.
The CB Richard Ellis report said India had witnessed addition of more than six million sq ft of organised retail mall space in the country across various primary and secondary locations of the National Capital Region, Mumbai, Bangalore and Chennai in the first half of 2011. Currently, India is the fifth largest retail market in the world, the report said.
Coinciding with action in the retail real estate space, leasing rentals have also gone up. For instance, in Mumbai, most high street outlets witnessed an increase in rentals. The Colaba Causeway rental was up by 10 to 11 per cent and malls in Central Mumbai recorded a rise in the range of 18 to 20 per cent due to high demand and low supply of quality space, according to CB Richard Ellis.