New Delhi: Tier 2 and 3 cities have outpaced metros cities in retail realty investment, a joint report by JLL India and CII has said.
“The retail sector in Tier 2 and 3 cities has witnessed a much higher investment of USD 6,192 million between 2006 and 2017 as against USD 1,295 million that came to Tier I metro cities during the same period,” the report said.
Releasing a joint retail report ‘Fuelling the Retail Revolution - The Paradigm of Emerging Cities’, the study found that 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, the report adds, have become a deterrent for expansion and growth of malls in big cities.
“The retail sector is among the top three employers in the country and its growth will drive the economy of our future cities,” Pankaj Renjhen, Managing Director, Retail, JLL India said.
Highlighting the withdrawal of malls across Tier 1 cities, the report identifies 20 cities including tier 2 cities such as Lucknow, Jaipur, Chandigarh, Kochi, Patna, Bhubaneshwar, Indore andNagpur among the leading cities, as the next retail destinations in the country.
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.
“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,” Chandrajit Banerjee, Director General, CII said.
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.