50 cities seen as hub of retail space boom

                                                                                         

Real estate consultancy Jones Lang Lasalle Meghraj has identified 50 Indian cities that are likely to witness most of the retail action over the next couple of years — both in terms of development of malls and advent of organised retailers. And Jaipur, Lucknow and Kochi find mention among cities poised for “high growth”.

Titled The geography of opportunity: The India 50, the report has divided these 50 cities into five categories: maturing, transitional, high-growth, emerging and nascent.

“With a population of over one million, these cities will form the core of India’s emerging retail market,” said Vincent Lottefier, CEO of Lasalle. “The top 15 cities in the list will contribute more than 80 per cent of the total national retail business by 2008.”

Delhi-NCR and Mumbai belong to the “maturing” category. Together, they account for about half of India’s organised retailing today. In future as supply increases, the report says, competition will intensify in these markets. By 2008, some segments could even see saturation.

But these maturing markets still offer opportunities. For instance, very large one-stop malls that integrate retail, entertainment, food and hospitality (hotels and service apartments) would find takers, as would malls hosting high-end, luxury brands, or those hosting large-format stores (such as hypermarkets).

“Transitional cities” include Bangalore, Kolkata, Hyderabad, Pune, Chennai and Ahmedabad. Said Vivek Kaul, associate director, retail and leisure advisory at the firm: “By 2008, transitional cities will account for one-third of organised retail space. Their large corporate sectors, high level of economic activity, above-average income, and large middle-class makes them attractive to all the leading retailers.”

Chandigarh, Jaipur, Ludhiana, Lucknow, Kochi, Surat and Vadodara belong to the third category of “high-growth cities”. In the perception of retailers, these are the “next” retail destinations. Ludhiana, with its high per capita income and a large NRI population, is the most favoured. Kochi, a fast-emerging IT-ITeS destination, is another.

“Emerging cities” — Nagpur, Indore, Nasik, Bhubaneshwar, Vizag, Coimbatore, Mangalore, Mysore and Thiruvananthapuram — where IT-ITeS companies are expanding, will become important over the next three years. The category also includes tourist destinations like Amritsar, Agra and Goa.

Cities where both income levels and corporate activities are limited — Patna, Bhopal, Meerut, Asansol, Varanasi, Kolhapur and Sonepat — are termed as “nascent”. These offer the first-mover advantage.

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