Taking forward the trends in the commercial real estate in the first half of 2018, the retail segment in Indian will continue to show an upward trend. As per a recent CBRE report, around 4-5 million square feet of additional supply is expected during the second half of 2018 across the National Capital Region, Mumbai, Bengaluru, Chennai, and Hyderabad.
“We foresee the addition of close to around 4-5 million sq ft of supply during H2 2018 across most major cities such as NCR, Mumbai, Bengaluru, Chennai and Hyderabad,” Anshuman Magazine, Chairman, India & South East Asia, CBRE, told Money Control. “With REITs in the offing, the focus on developing investment grade developments is likely to redefine the retail segment in India.”
The first half of 2018 saw a robust growth in the retail segment with the addition of about 1.9 million sq ft of fresh retail supply across seven key cities. The growth in the commercial real estate was led by Chennai, followed by Hyderabad and NCR.
The period saw the launch of the VR Mall (1 million sq ft) in Chennai, L&T Hyderabad Next and L&T Next Galleria (totaling 0.65 million sq ft) in Hyderabad, and 32nd Avenue (0.25 million sq ft) in Gurgaon-NCR. Leading international brands such as Dyson, Molton Brown, Berluti, American Eagle, Antony Morato, Daniel Wellington and Bath & Body Works made its way into Indian markets with the opening of their first stores.
The second half of 2018 will continue to see the expansion of international brands across other Tier-1 and Tier-2 cities. Brands such as Tom Tailor, Miniso, Taco Bell, Mango, Marks & Spencer, H&M, and Starbucks will continue to expand operations by entering into new markets across the country.
Some of the other trends that are expected to be seen in the commercial retail segment of Indian real estate are an inclination towards omnichannel retailing that provides consumers a unified experience across online and offline platforms. Redevelopment of old properties/retail properties, adoption of shorter lease terms and an increased interest from institutional investors over the past 2-3 years should also create upheaval in the retail real estate in H2 2018.