Boom times for Retail Real Estate in India
Retailing in India continues to be a booming industry. The Indian retail sector has seen strong interest from global players as well as Indian companies particularly since the government opened the doors for FDI in single-brand retail in Feb this year. According to this year’s Global Retail Development Index by A.T. Kearney, India is positioned globally as the leading destination for retail investment.
Retail is already India’s largest industry, accounting for over 10.0% of the country’s GDP and around 8.0% of the employment. Expected growth is at 32.0% CAGR over the next ten years to reach a size of USD 60 billion by 2015. While India already has the highest retail outlet density in the world with the unorganized sector contributing a major chunk (98.0%), the modern retail sector is emerging in India with an increasing trend towards multi-storey malls, supermarkets, hypermarkets and convenience stores.
This information was released in a Jones Lang LaSalle report - Asia Pacific Property Digest Second Quarter 2006.
According to the Jones Lang LaSalle report, demand for prime retail space remains strong in key cities due to the absence of adequate supply. A number of retailers are also shifting focus to secondary areas causing upward pressure on retail real estate rentals in those areas. For example, in Bangalore a lot of retailers are shifting focus to areas such as Indiranagar and Jayanagar 4th Block.
In terms of new construction, Mumbai is seeing a construction of 5.4 million sq. ft. of mall space. In Bangalore the Esteem Mall with 120,000 sq. ft. of retail space is soon to be operational on Bellary Road near Hebbal. In Delhi, the AEZ Carnival Country Mall has opened in East Delhi while The Great India Place by Unitech and Ambi Mall by Ambience Infrastructure are to be operational by the end of the year.
With low vacancy rates, rentals continue to be strong across key cities. In Delhi, high-street rentals have surged by 20% versus the first quarter, while Bangalore has witnessed an increase of 10%-13% for high-street rentals and 20-25% for rentals in secondary locations. In Mumbai, both rentals and capital values have been relatively stable in the second quarter versus the first quarter of this year.
Jones Lang LaSalle is a global real estate money management and services firm with operations in 50 countries and more than 100 offices worldwide. The company provides comprehensive integrated real estate and investment management expertise on a local, regional and global level to owner, occupier and investor clients.
By INRnews Correspondent
This information was released in a Jones Lang LaSalle report - Asia Pacific Property Digest Second Quarter 2006.
According to the Jones Lang LaSalle report, demand for prime retail space remains strong in key cities due to the absence of adequate supply. A number of retailers are also shifting focus to secondary areas causing upward pressure on retail real estate rentals in those areas. For example, in Bangalore a lot of retailers are shifting focus to areas such as Indiranagar and Jayanagar 4th Block.
In terms of new construction, Mumbai is seeing a construction of 5.4 million sq. ft. of mall space. In Bangalore the Esteem Mall with 120,000 sq. ft. of retail space is soon to be operational on Bellary Road near Hebbal. In Delhi, the AEZ Carnival Country Mall has opened in East Delhi while The Great India Place by Unitech and Ambi Mall by Ambience Infrastructure are to be operational by the end of the year.
With low vacancy rates, rentals continue to be strong across key cities. In Delhi, high-street rentals have surged by 20% versus the first quarter, while Bangalore has witnessed an increase of 10%-13% for high-street rentals and 20-25% for rentals in secondary locations. In Mumbai, both rentals and capital values have been relatively stable in the second quarter versus the first quarter of this year.
Jones Lang LaSalle is a global real estate money management and services firm with operations in 50 countries and more than 100 offices worldwide. The company provides comprehensive integrated real estate and investment management expertise on a local, regional and global level to owner, occupier and investor clients.
By INRnews Correspondent
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