Top retailers tap tier-II markets for growth – Industry News

As many as 35 major domestic and international retail brands entered 14 tier-II Indian cities in the first three quarters of calendar year 2023, consultancy CBRE South Asia said in a report on Tuesday. The trend points to the growing affinity of brands in these markets, CBRE said, led by a digital boom, growing aspirations and a surge in discretionary purchases. The cities include Chandigarh, Jaipur, Indore, Goa, Mangalore, Kochi, Lucknow, Patna, Ranchi, Guwahati, Bhubaneshwar, Vizag, Mysore and Coimbatore.

The brands that marked their presence in these markets include Croma, Armani Exchange, Malabar Gold and Diamonds, Reliance Smart, Tanishq, H&M, Marks and Spencer, GAP, Starbucks, Pizza Express and Under Armour among others.

“Most non-metro cities are established trade and business hubs and are now witnessing multinational corporations and start-ups setting up offices as well. Growing population in tier-II cities are further propelling demand for a diverse range of retail offerings,” Anshuman Magazine, chairman and CEO, India, Southeast Asia, Middle East and Africa, CBRE, said.

For instance, well-planned infrastructure, economic growth and tourism has made Chandigarh a prominent retail market in Punjab, CBRE said. Lower operating costs, a good talent pool, and proximity to Delhi-NCR have led to Jaipur becoming a major business hub too. The Lucknow retail real estate market is witnessing robust growth driven by several factors, such as rapid urbanisation and a growing middle class, the consultancy added.

The total retail stock in the 14 cities stood at 29 million (mn) square (sq) feet (ft) as of September 2023, with Jaipur, Lucknow, and Chandigarh each having retail stock ranging between 3 to 7 mn sq ft.

Also, the retail development in these cities has been a healthy mix of high streets and malls, CBRE says. The total retail supply recorded in these 14 cities has been 2.4 mn sq ft during the July-September quarter. Top cities dominating supply addition during this period include Chandigarh, Jaipur and Lucknow.

The total retail absorption across the 14 cities stood at 2.4 mn sq ft in the July-September period, led by Kochi, Jaipur and Goa, the report said.