Foreign retail chains pushing up demand for mall space in India

Demand for retail space in India from international and domestic brands as well as smaller retailers continued to strengthen throughout 2013, with the second half of the year witnessing an increase in demand for quality retail space in Delhi NCR, Pune and Chennai, according to real estate research firm CBRE.

Its latest report, India Retail Market View H2 2013, released on Thursday, finds that demand from global retailers in the Delhi NCR and Mumbai markets remained buoyant, and more retail groups sought space in prime shopping centres, rather than standalone high street outlets, says the report.

It says the total organised retail space supply in 2013 stood at approximately 4.7 million sq ft, witnessing a strong year-on-year growth of about 78 per cent over the total mall supply of 2.5 million sq ft in 2012. Most of the supply in 2013 was concentrated across Tier II cities; however 2014 is likely to witness supply addition in the key hubs of Delhi National Capital Region (NCR) and Mumbai.

Anshuman Magazine, CBRE's South Asia chairman and managing director, said, "Despite ongoing uncertainty, retail real estate witnessed good activity during 2013 with a number of international brands entering and expanding across key cities. The year 2014 is expected to remain positive for the retail sector, with existing brands expected to ramp up operations and new brands look to making their India entries. Although domestic retailers have been performing steadily, they face competition from global retail groups, especially in the apparel and F&B (food & beverage) segments."

Prominent global retail chains such as Starbucks, Krispy Kreme, Dunkin Donuts, Forever 21, Zara and Superdry expanded their presence across the country's leading cities.

Retailers in the luxury and bridge-to-luxury segments were particularly active, with brands such as Brooks Brothers, Missoni, Michael Kors and Emilo Pucci making inroads into the country's marketplace.