Recently, a higher growth potential of smaller cities is identified in top 20 cities such as Lucknow, Jaipur, Chandigarh, Kochi, Patna, Bhubaneshwar, Indore and Nagpur among the leading cities that will drive retail growth basis total retail stock, upcoming supply, retailer presence, retailer expansion plans and investments, according to the reports.
As per the report, Jaipur ranks 1st in total current retail stock while Lucknow ranks 1st in upcoming retail supply. Factors like lack of available space in retail malls in metro cities, increasing lease rentals in metro malls, and high land prices in tier I cities have made it difficult for retailers to own real estate in these cities. These factors, the report added, have become a deterrent for expansion and growth of malls in big cities.
“The retail sector is among the top three employers in the country and its growth will drive the economy of our future cities. Emerging destinations like Lucknow, Jaipur, Chandigarh, Kochi, Indore, Nagpur and Bhubaneshwar are going to be the next big retail hubs. It is for this reason, retailers and private equity firms have started taking an increased interest in Indian retail sector through investments in high-end retail malls in Tier 2 and 3 cities. The report released today presents an overview of this expansion and provides an insight into various trends across the retail development market,” said Pankaj Renjhen, MD- Retail, JLL India.
“India’s economic potential lies in the growth of smaller cities that have been witnessing transformation on all fronts – urban housing, infrastructure, offices and retail real estate. Being a key component of this development, retail has the ability to drive future growth and add value to the overall infrastructure of these cities. While there is an opportunity in Tier 2 and 3 cities for this sector, a strong focus is required to build the necessary infrastructure to support the growth. Through our National Retail Summit 2017 and the release of an insightful report, we aim to identify the challenges that may impede the growth and leverage the available opportunities,” said Chandrajit Banerjee, Director General, CII.