Jaipur ranks 1st in total current retail stock while Lucknow ranks 1st in upcoming retail supply

As many as 20 tier 2 cities including Lucknow, Jaipur, Chandigarh, Kochi, Patna, Bhubaneshwar, Indore and Nagpur are the next retail destinations in the country and have received much higher investment of  $6,192 million between 2006 and 2017 as against $1,295 million that came to Tier I metro cities during the same period, says a new report.

The study bases its findings on key parameters such as total retail stock, upcoming supply, retailer presence, retailer expansion plans and investments. It gives details on various formats of developments that Tier 2 and 3 cities are currently witnessing.

Factors like lack of available space in retail malls in metro cities, increasing lease rentals in metro malls, and high land prices in Tier 1 cities have made it difficult for retailers to own real estate in these cities. These factors, says the report by JLL India Fuelling the Retail Revolution - The Paradigm of Emerging Cities in association with the CII National Retail Summit, 2017.

Making a strong case for Tier 2 cities, the report says that factors like international airport connectivity across cities such as Lucknow, Kochi, Bhubaneswar, Nagpur to name a few, rising levels of disposable income have prompted various global and local brands to plan their expansion plans in these cities.

“The retail sector is among the top three employers in the country and its growth will drive the economy of our future cities. 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 2 and 3 cities. The report released today presents an overview of this expansion and provides an insight into various trends across the retail development market,” says Pankaj Renjhen, Managing Director – Retail, JLL India.

“India’s economic potential lies in the growth of smaller cities that have been witnessing transformation on all fronts – urban housing, infrastructure, offices and retail real estate. Being a key component of this development, retail has the ability to drive future growth and add value to the overall infrastructure of these cities. While there is an opportunity in Tier 2 and 3 cities for this sector, a strong focus is required to build the necessary infrastructure to support the growth. Through our National Retail Summit 2017 and the release of an insightful report, we aim to identify the challenges that may impede the growth and leverage the available opportunities,” says Chandrajit Banerjee, Director General, CII.