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Main streets ruling retail space in metros: Report

Mumbai: Realty consultant Cushman & Wakefield in its findings has said that there is continued trend of main streets ruling the retail leasing landscape in the top eight Indian cities. 

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Mumbai: Realty consultant Cushman & Wakefield in its findings has said that there is continued trend of main streets ruling the retail leasing landscape in the top eight Indian cities. 

“The demand for main streets has heightened in absence of new mall supply in most of these cities coupled with scarcity of available quality space in the existing malls. Largest contributor to main street leasing has been the apparel segment followed by Food & Beverages. Online players have also established considerable offline presence by opening brick & mortar stores on main streets for better visibility as compared to malls,” read its report.

“With a strong demographic dividend of young aspiring middle class and favourable government policies allowing 100% Foreign Direct Investment in single brand retail, there is high degree of interest from investors and developers to increase their stakes in retail assets in the country. There is a strong pipeline of under construction malls in top eight Indian cities.  However, as new quality mall supply is expected to take couple of years to be operational across the country, transactions are likely to increase further on the main streets,” said Anshul Jain, Country Head & Managing Director India, Cushman & Wakefield.

In Q1 2018, 0.85 million sq. ft. of fresh mall was supplied in the markets. While 14.22 million sq. ft. of new malls are under construction. A total of 32 new malls are expected to come up by the year 2020.

In Q1 of 2018’s calender year, of the total leasing transactions recorded in top eight cities, over 80% were on main streets vis-à-vis malls. Of the total reported leasing of 12,64,423 sq. ft. in top eight cities, main streets accounted for 10,22,345 sq. ft.

Ahmedabad, Hyderabad and Bengaluru clocked almost 100% of city’s leasing on main streets in Q1 2018, the share was considerably higher in other cities as well.

Indian mall space retail continues to witness interest from Private Equity players, who are keen to capitalise on the rising middle-class consumption in both tier I and tier II cities. Some of the international PE funds that are looking at getting controlling stakes or complete ownership of retail assets in India include the likes of The Blackstone Group, Canada Pension Plan Investment Board (CPPIB) and the Xander Group.

India is a key retail market with a 1.3 billion population, 50% of which is below the age of 25, a growing middle class, high urbanisation rate and a fast-growing economy.

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