Mumbai: Despite negative sentiment, retail real estate market appears to be promising as leading brands and retailers are pursuing expansion plans aggressively, says commercial real estate services firm CBRE.
According to a survey 'India Retail Market View' by CBRE, India witnessed increased transaction activity and retailer expansion in January-June period.
"Leading brands and retailers pursued expansion plans aggressively, increasing their presence across key retail hubs. Retail mall rentals witnessed growth in prime city micro markets of Delhi, while values in high streets increased in Mumbai, Bangalore and Pune," the report said.
In all the seven major cities, the retail real estate market appears to be promising with an increase in retailer enquiries, CBRE, South Asia chairman and managing director Anshuman Magazine said in a statement.
"The same can be attributed to the heightened interest by retailers, coupled with a low base of supply addition as developers continue to focus on attracting tenants in completed products and reducing current vacancy rather than launching new projects," he said.
Nearly 1.12 million sq ft of mall supply was added in the first half of the year, largely concentrated in Bangalore, which was less than 20 per cent of almost 6 million sq ft added during the same period last year.
"The rising level of activity in retail space across key cities is testimony to the growing confidence of domestic and international retailers in India," Magazine said.
He said retailers are looking to expand operations beyond the top three cities to include Hyderabad, Chennai, Kolkata, Pune and Chandigarh due to growing urbanisation and an increase in the acceptance of organised retail.
"Going ahead, transaction activity and size are expected to increase on the back of higher consumer spending and expanding mid-income purchasing power. The anticipated changes in the FDI regime should propel the demand for organised retail space further," he added.