Retail sector in Tier-II and III cities has received higher investment than that to Tier-I cities in India, during the last 10 years.
Retail sector in Tier-II and III cities has received higher investment than that to Tier-I cities in India, during the last 10 years.
This is what was amongst the outcome of the report - ‘Fuelling the Retail Revolution - The Paradigm of Emerging Cities’ by real estate consultant JLL India.
As per the report, the retail sector in Tier II and III cities have witnessed a much higher investment of USD 6,192 million between 2006 and 2017 as against USD 1,295 million that came to Tier I metro cities during the same period.
The report identified 20 cities including Tier-II cities such as Lucknow, Jaipur, Chandigarh, Kochi, Patna, Bhubaneshwar, Indore and Nagpur among the leading cities, as the next retail destinations in the country. However, on the other hand, Tier-I cities are witnessing withdrawal of malls.
The study bases its findings on key parameters such as total retail stock, upcoming supply, retailer presence, retailer expansion plans, investments, etc.
The report also highlighted that factors like lack of available space in retail malls in metro cities, increasing lease rentals in metro malls combined with high land prices in Tier-I cities have made it difficult for retailers to own real estate in these cities. These factors have become a deterrent for expansion and growth of malls in metropolitan or Tier-I cities.
Among the factors for Tier-II cities, for attracting investments are international airport connectivity across cities such as Lucknow, Kochi, Bhubaneswar, Nagpur, etc; rising levels of disposable income have prompted various global and local brands to plan their expansion plans in these cities.
Pankaj Renjhen, Managing Director – Retail, JLL India said, “Emerging destinations like Lucknow, Jaipur, Chandigarh, Kochi, Indore, Nagpur and Bhubaneshwar are going to be the next big retail hubs. It is for this reason, retailers and private equity firms have started taking an increased interest in Indian retail sector through investments in high-end retail malls in Tier-II and III cities.”
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 "Tier-II, III cities attract more funds for malls than metros")
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