According to CBRE South Asia report, the total retail stock in 14 tier-2 cities stood at 29 mn. sq. ft. as of September 2023
New Delhi: Nearly 35 major domestic and international retail brands entered 14 tier-2 cities in the January to September 2023 period, according to a report by the real estate consulting firm CBRE South Asia Pvt. Ltd.
The 14 cities include Chandigarh, Jaipur, Indore, Goa, Mangaluru, Kochi, Lucknow, Patna, Ranchi, Guwahati, Bhubaneshwar, Vizag, Mysore, and Coimbatore.
The report titled ‘Tier-II Cities: The Time to Shine’ shows that several domestic and international retail brands, including Croma, Armani Exchange, Malabar Gold & Diamonds, Reliance Smart, Tanishq, H&M, Marks & Spencer, GAP, Starbucks, Pizza Express, Under Armour, among others, have expanded their retail footprint to tier-2 cities in the said period.
According to the report, the total retail stock in these cities stood at 29 mn. sq. ft. as of September 2023, with Jaipur, Lucknow, and Chandigarh each boasting retail stock ranging between 3 to 7 mn. sq. ft. The retail development in these cities has been a healthy mix of high streets and malls.
The total retail supply recorded in the 14 cities has been around 2.4 mn. sq. ft. in the said period. Top cities dominating supply addition during this period include Chandigarh, Jaipur and Lucknow.
The total absorption across the 14 cities stood at 2.4 mn sq. ft., led by Kochi, Jaipur, and Goa.
Speaking on the report, Anshuman Magazine, chairman & chief executive officer, India, Southeast Asia, Middle East & Africa, CBRE, said, “The e-commerce boom, tech-savvy consumer base, growing aspirations and surge in discretionary purchasing are defining the retail growth in tier-II cities. Investment-grade developers are setting up large-sized contemporary malls in these cities, which are seen as an entertainment destination and not just as a place to shop.”
He added that most non-metro cities have established trade and business hubs and are now witnessing multinational corporations and start-ups setting up offices as well. Growing population in tier-II cities are further propelling demand for a diverse range of retail offerings.
“Tier-II cities have recorded a massive surge in retail developments over the last three years. India’s first retail Real Estate Investment Trust (REIT) has encouraged developers to aggregate and upgrade their existing facilities, apart from developing new malls. Moreover, domestic and international fashion brands are looking to expand in non-metro cities, fueled by a well-aware and well-travelled consumer set,” said Ram Chandnani, managing director, Advisory & Transactions Services, CBRE India.
