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Emerging Tier- 2 retail hotspots in North India

The report from CBRE South Asia states that 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 deȱ ning 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.”

Tier 2 North cities shine

Chandigarh

Owing to the presence of an affluent consumer base, well-planned infrastructure, economic growth, tourism, and the presence of domestic and international retail brands, Chandigarh has grown to become a prominent retail market in Punjab. Chandigarh, alongside its sister
cities – Mohali, Panchkula, and Zirakpur, have emerged as a prominent retail destination, offering a thriving market for growth and development.

The city’s consistent growth into a prominent tech hub in Punjab has attracted a significant inȷ ux of residents over time. As a result, numerous popular cafes and eateries have emerged to cater to the growing population.

  • Retail space absorption during Jan-Sep’23 stood around ~0.25 mn. sq. ft., supply stood ~0.4 mn. sq. ft. Nexus Elante Mall, one of the leading malls in Chandigarh houses several prominent global and domestic brands
  • Key micro-markets of Chandigarh are located at Sector 17 and 35 – Madhya Marg in Chandigarh, Phase 3B – 2, Sector 82, Sector 70, Phase -7 in Mohali, Sectors 8, 9, & 20 in Panchkula. The Ambala – Chandigarh Expressway, VIP Road in Zirakpur too is emerging as a micro-market wherein Cosmo Mall, well-known for its factory outlet stores is located. The micro-market also houses Dhillon Plaza – an organised retail high street that includes athleisure, hypermarkets, multiplex, fashion & apparel brands, along with drive-through QSR formats
  • Key brands present in the city include Zara, Uniqlo, Lifestyle, Shoppers Stop, Marks & Spencer, The Collective, Nike, Adidas, Skechers, Puma, Frontier Raas, Taco Bell, and Ritu Kumar among others
  • HLP Galleria, Jubilee Junction, Central Street, and Mohali Citi Center are some of the major upcoming developments in the city.

Jaipur

Lower operating costs, a good talent pool, and proximity to Delhi-NCR have led to Jaipur becoming a prominent business hub. The city also houses an international airport and an air cargo complex, making it a reliable destination for facilitating exports.

In addition to renowned local markets like Chandpole Bazaar, Johari Bazaar, Sireh Deori Gate and Kishanpole Bazaar, which are famed for their exclusive offerings which include jewellery, gemstones, textiles and home décor, Jaipur also boasts a vibrant scene of
high-end designer boutiques, multi-brand stores and contemporary home décor outlets.

  • Retail space absorption during Jan-Sep’23 stood at nearly ~0.5mn. sq. ft., supply stood at ~0.3 mn. sq. ft.
  • Key retail micro markets in Jaipur include Malviya Nagar, C-Scheme, M.I. Road and Vaishali Nagar Key brands present in the city include Zara, Lifestyle, Shoppers Stop, Marks & Spencer, Starbucks, Mango, Adidas, FabIndia, Croma among others
  • Key malls in the city are World Trade Park Mall, Mall of Jaipur and GT General
  • Upcoming supply in the city will be in Pacific Mall and Pink Walk

Lucknow

The Lucknow retail real estate market is witnessing robust growth driven by several factors, such as rapid urbanisation and a growing middle class, increasing consumer spending, the emergence of new shopping malls and high-street retail formats and expansion of domestic and international retail brands.

In recent years, the city has witnessed the development of various infrastructure projects leading to enhanced connectivity with neighbouring towns. This has positioned Lucknow as a retail destination not only for the residents but also for those residing in nearby towns.

  • Retail space absorption during Jan-Sept ’23 stood at ~0.05 mn. sq. ft., supply stood at ~0.2 mn. sq. ft. Key retail micro markets in Lucknow are Gomti Nagar, Hazratganj and Ashiyana & Alambagh along with Aliganj
  • Houses prominent retail destinations such as Fun Republic Mall, Lulu Mall and Phoenix Pallasio with a mix of F&B, electronics, fashion & apparel brands
  • Key brands present in the city include Lifestyle, Westside, Marks & Spencer, Max, Pantaloons, Skechers, Nike, and Croma among others
  • Summit Twin Tower, Rishita City Centre, Shalimar Lakeside are some of the upcoming developments in the city.

Patna

Patna, the second most populous city in Eastern India is bolstering retail businesses, along with being the principal administrative, industrial and educational centre of Bihar. Patna has jumped on board the retail bandwagon owing to rising income levels, availability of relatively affordable real estate, and brand awareness among customers – thereby resulting in the entry of major domestic retailers. The city boasts a thriving retail sector, with a mix of traditional markets, modern shopping malls, and bustling commercial areas.

  • Houses City Centre Mall, RC Western Mall which includes several domestic and international brands
  • Prominent highstreets and jewellery hub which caters to several residential catchments offering a wide range of products across fashion, cosmetics, electronics along handicrafts
  • Key brands Reliance Trends, Westside, Zudio, Pantaloons, Tasva, H&M, Lifestyle
  • Upcoming supply Pentagon Mall and JVR Mall

The post Emerging Tier- 2 retail hotspots in North India appeared first on India Retailing.



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