Retail revolution sweeps across tier-II cities as 35 major brands expand in Jan-Sep'23

Tier-II retail revolution: Nearly 35 major domestic and international retail brands have made a significant foray into 14 Tier-II cities between January and September 2023. The cities witnessing this retail boom include Chandigarh, Jaipur, Indore, Goa, Mangalore, Kochi, Lucknow, Patna, Ranchi, Guwahati, Bhubaneshwar, Vizag, Mysore, and Coimbatore, according to a report by CBRE.

A multitude of retail giants, such as Croma, Armani Exchange, Malabar Gold & Diamonds, H&M, Marks & Spencer, and Starbucks, have expanded their footprint in these cities. The report reveals a strategic move by brands like Tanishq, GAP, and Under Armour, demonstrating a keen interest in tapping into the growing markets of non-metro cities.

Retail landscape and market dynamics

As of September 2023, the total retail stock in these 14 cities has reached 29 million sq ft, with notable contributions from Jaipur, Lucknow, and Chandigarh, each boasting retail stocks ranging between 3 to 7 million sq ft The retail development is marked by a healthy mix of high streets and malls, totalling approximately 2.4 million sq ft recorded during July-September 2023.

Citywise retail boom

Chandigarh:

Chandigarh has established itself as a robust retail market, attributing its success to factors like a well-to-do consumer base, thoughtfully planned infrastructure, and a mix of global and local brands. From January to September 2023, the city saw a notable retail space absorption of about 0.25 million sq ft, coupled with a retail supply of approximately 0.4 million sq ft.

Key micro-markets include Sector 17, Sector 35 – Madhya Marg, Phase 3B - 2, Sector 82, Sector 70, Phase -7, Ambala – Chandigarh Expressway, and VIP Road in Zirakpur, acting as pivotal hubs for retail activities.

Chandigarh currently houses a diverse range of global and local brands, including Zara, Uniqlo, Lifestyle, Shoppers Stop, Marks & Spencer, The Collective, Nike, Adidas, Skechers, Puma, Frontier Raas, Taco Bell, and Ritu Kumar. Looking ahead, the city is set to expand its retail offerings with upcoming developments such as HLP Galleria, Jubilee Junction, Central Street, and Mohali Citi Center.

Jaipur:

Jaipur is capitalising on lower operating costs, a skilled talent pool, and its strategic proximity to Delhi-NCR. Notably, in the Jan-Sep '23 period, the city witnessed noteworthy developments in retail, absorbing approximately 0.5 million sq ft while supplying around 0.3 million sq ft.

Key micro-markets driving Jaipur's retail growth include Malviya Nagar, C-Scheme, M.I. Road, and Vaishali Nagar, serving as key commercial hubs.

The city's retail landscape is adorned with renowned brands such as Zara, Lifestyle, Shoppers Stop, Marks & Spencer, Starbucks, Mango, Adidas, FabIndia, and Croma, contributing to a diverse shopping experience.

Integral to Jaipur's retail scene are prominent malls like World Trade Park Mall, Mall of Jaipur, and GT General, each offering a unique shopping environment. Looking ahead, the city anticipates continued retail expansion with upcoming supply additions like Pacific Mall and Pink Walk.

Lucknow:

Lucknow's retail real estate market is on an upward trajectory, driven by factors such as rapid urbanisation, a growing middle class, and the emergence of new shopping malls. From January to September '23, the city saw a significant retail space absorption of around 0.05 million sq ft, matched by a retail supply of approximately 0.2 million sq ft Key micro-markets contributing to this growth include Gomti Nagar, Hazratganj, Ashiyana, and Alambagh.

Noteworthy brands like Lifestyle, Westside, Marks & Spencer, Max, Pantaloons, Skechers, Nike, and Croma have established a strong presence in Lucknow's retail scene, enhancing the city's shopping offerings.

Looking forward, Lucknow is set for further expansion with upcoming projects such as Summit Twin Tower, Rishita City Centre, and Shalimar Lakeside.

Indore:

Indore witnessed notable retail growth from January to September '23, driven by a thriving residential sector and an active trade market. The city reported substantial retail space absorption at around 0.3 million sq ft, with a retail supply of less than 0.1 million sq ft. Key micro-markets contributing to this growth include AB Road, Central Indore, Sapna Sangeeta, and East Indore.

Indore's retail landscape hosts brands like Westside, Pantaloons, The White Crow, BlueStone, Tanishq, Tasva, Farzi Café, H&M, Fabindia, Starbucks, Croma, Zudio, Inox, Hamleys, and More.

Goa:

Goa, known for its tourist appeal, maintains a robust retail sector, drawing from a consistent influx of customers year-round. In the Jan-Sep '23 period, the city recorded a retail space absorption of around 0.4 million sq ft, accompanied by a retail supply of approximately 0.3 million sq ft. Key micro-markets driving this growth include Panjim, Margao, and Mall De Goa.

Notable brands such as Levi's, Puma, Adidas, Skechers, Nike, Orra, Vero Moda, Only, and others contribute to the diverse retail landscape in Goa. Looking forward, the city is poised for continued retail development with the upcoming addition of DLF Mall in Panjim.