India Organised Retail Market 2010

A report by Knight Frank India.
research

Knight Frank India, the country’s leading independent global property consultants, announced the release of their in-depth research study on the Indian retail market entitled “India Organized Retail Market 2010.” The study provides a unique and insightful documentation towards providing a concrete understanding of the current market trends, evolution of the organized retail space and real estate retail supply. However, the key highlight of the report is the observation and analysis that provides a view on the demand-supply situation and prevailing rentals in each of the 7 major metros in the country.  In relation, it provides a micro view of the Mumbai retail market as well as details the factors influencing its growth. 

 

Highlights

  • ORS 95 million sq ft by 2012 from 41 million sq ft currently
  • Estimated 21 million sq ft oversupply in 7 cities by 2012

 

 

Organised retail space in Mumbai is expected to grow by around 130 per cent, from 8.72 million sq ft at present to 20 million sq ft by 2012, according to Knight Frank India report. The report, India Organised Retail Market 2010, forecasts that during 2010-12, around 55 million sq ft of retail space will be ready in Mumbai, NCR, Bangalore, Kolkata, Chennai, Hyderabad and Pune. Besides, between 2010 and 2012, the organized retail real estate stock will grow from the existing 41 million sq ft to 95 million sq ft.

The report reveals an in-depth analysis of the dynamics of Organized Retail Market and the Real Estate Retail Potential (RERP) to identify the oversupply or undersupply situation in the retail space.  Knight Frank further estimates that by 2012, higher pace of real estate developments in comparison to the pace of organized retail market growth will create an oversupply situation of 21 million sq ft in 7 cities. Its examination of the state of affairs of the retail market implies that the frenetic rental hikes witnessed during the boom will not haunt retailers until 2012.

Dr Samantak Das, National Head—Research Knight Frank India said: Our research has undertaken an extensive survey of all major operational and upcoming malls and 2 prominent high streets in each of these 7 cities. The report determines the performance of the operational malls in terms of occupancy, rentals; retail formats and also foresees the demand-supply dynamics till 2012.”

  • Knight Frank India estimates Mumbai’s Organized Retail Stock (ORS) to touch  20 million sq .ft. by 2012 while country’s ORS estimated to reach 95 million sq ft
  • 6.4 million sq ft retail space to be available in Mumbai by end of 2010
  • 4.7 million sq ft to be completed over the next two years
  • 1.76 million sq ft of retail space currently vacant in the city.

 

Mumbai currently has 8.72 mn sq ft organized retail stock which will estimated to reach 20.00 mn.sq ft by 2012. Besides, presently the city has faced a situation of oversupply since there is 20% vacancy of retail space in the market.

The demand-supply forecast model indicate that the Organized Retail Market (ORM) to grow from Rs 74 billion in 2009 to Rs 203 billion in 2012, whereas, the Real Estate Retail Potential (RERP) will increase from Rs.79 billion to Rs.216 billion. The model also predicts that in 2012, Mumbai will continue to face the situation of oversupply by 1.31 million sq. ft. which accounts to 6 per cent of the total retail stock. But, the Western Suburbs and Island city both will have undersupply of retail space. However, Navi Mumbai and Central Suburbs will have oversupply.

 

Area

Current Distribution of Retail Stock

Current Mall Vacancy

Upcoming Mall Supply till 2012

Island City

15%

4%

6%

Western Suburbs

43%

21%

20%

Central Suburbs

27%

29%

62%

Navi Mumbai

15%

19%

13%

 

 

 

 

 

 

 

In Mumbai, 6.4 million sq ft of retail space will be available by the end of 2010 and about 4.7 million sq ft will be completed over the next two years. For Chennai market, approximately 7.49 million sq ft of organized retail space is expected to come up during the next three years,” said Das.

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