35% of new retail space will come up in the next 2 years in Tier II and Tier III towns.
35% of new retail space will come up in the next 2 years in Tier II and Tier III towns.
MUMBAI: Thrissur, Rajahmundry, Kundli, Jasola….
Names of these small towns may not ring a bell with many, but for the mall mavens, they provide an ever-increasing footfall catchment areas as the modern retail format fever spreads across the country.
According to the international property consultancy firm Knight Frank, 35% of the new retail space being developed in the country is in about 50 Tier II and Tier III towns.
And these towns are going to have 41.4 million square feet of modern retail space in next two years.
Arvind K Singhal, chairman of management consultancy firm Technopak, says the move is wholly understandable.
“Till now, lack of planning has marred Indian cities - they just haven’t been able to fulfill the growing demands of a rising economy and population. Naturally malls are popping up all over to fulfill these demands.”
Knight Frank says growth in the rural population and an increase in agricultural income offers considerable scope for innovative retail formats.
Besides, in the small towns the involvement of consumer at malls is far greater than at the big towns.
Consultant Harish Bijoor says since there is lack of diversified avenues of entertainment at small towns, malls become the biggest entertainment and hangout place.
“Besides, it is also in cashing the increasing prosperity at the small towns.”
The National Capital Region would alone be garnering 22% of the new retail space coming up in the next two years, while Mumbai would follow with 15%, the Knight Frank report said.
The report estimates the emergence of total 117.4 million square feet of new retail space in India in two years from now.
Modern retail in India is still at a nascent stage as it is only 3% of the total 1 million core retail market of the country.
However, the Rs 30,000 crore modern retail industry is growing at a frenetic pace of about 30%.
So far the revolution has been restricted to the seven major cities of the country - the metros. These cities will also get 65% of the new retail space coming up in next two years, Knight Frank said.
However, the inroads created by the modern retail in Tier II and Tier III towns will take the sector’s growth to a new trajectory.
Out of the total 361 mall projects that are under construction currently, 227 are in the top 7 cities, while the rest 134 are distributed over various Tier II and Tier III towns.
“This reveals the far-reaching effects of positive macro trends in changing the consumer preferences and shifting mindsets towards organized retailing experience,” says the report.
The growth in the mall space is also a telling commentary on the inability of the existing market places to cater to the increasing demand.
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