New Delhi [India], January 16 : Nearly 35 major domestic and international retail brands entered as many as 14 tier-II Indian cities in the first three quarters of 2023, according to a report by CBRE South Asia. These cities include Chandigarh, Jaipur, Indore, Goa, Mangalore, Kochi, Lucknow, Patna, Ranchi, Guwahati, Bhubaneshwar, Vizag, Mysore, and Coimbatore.
As per the report by the real estate consulting firm, several domestic and international retail brands, including Croma, Armani Exchange, Malabar Gold and Diamonds, Reliance Smart, Tanishq, H&M, Marks and Spencer, GAP, Starbucks, Pizza Express, Under Armour, among others, have expanded their retail footprint to tier-II cities.
According to the report, the total retail stock in these 14 tier-II cities stood at 29 million (mn) square (sq) feet (ft) as of September 2023, with Jaipur, Lucknow, and Chandigarh each boasting retail stock ranging between 3 to 7 mn sq ft.
The retail development in these cities has been a healthy mix of high streets and malls. 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 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 noted.
Anshuman Magazine, Chairman and CEO, India, Southeast Asia, Middle East and Africa, CBRE, said, "The E-commerce boom, tech-savvy consumer base, growing aspirations and surge in discretionary purchasing are defining the retail growth in tier-II cities. Investment-grade developers are setting up large-sized contemporary malls in these cities, which are seen as an entertainment destination and not just as a place to shop."
"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."
Owing to the presence of an affluent consumer base, well-planned infrastructure, economic growth, tourism, and the presence of domestic and international retail brands, Chandigarh has grown to become a prominent retail market in Punjab. Chandigarh, alongside its sister cities - Mohali, Panchkula, and Zirakpur, has emerged as a prominent retail destination.
Lower operating costs, a good talent pool, and proximity to Delhi-NCR have led to Jaipur becoming a prominent business hub. The city also houses an international airport and an air cargo complex, making it a reliable destination for facilitating exports.
The Lucknow retail real estate market is witnessing robust growth driven by several factors, such as rapid urbanization and a growing middle class, increasing consumer spending, the emergence of new shopping malls and high-street retail formats and expansion of domestic and international retail brands.
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