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market intelligence
OCtOBer 2011 . images retail . 39
O t Bt Tc20 Idi ti dtitio ot oi
Dfi Cit Ti Jones Lang LaSalle’s city tiering
system is based on the combined
current levels o real estate activity
(supply and demand) in three
key sectors – oces, retail and
hospitality.
• Tier I cities currently comprise
o Delhi, Mumbai and
Bangalore;
• Tier II cities comprise o
Chennai, Hyderabad, Pune and
Kolkata;
• Tier III cities comprise thebalance o the cities in our
analysis.
Cities can move between tiers as
market circumstances change.
Kolkata, or example, moved
rom a Tier III to Tier II city in
2007 to refect increasing levels
o real estate activity. Similarly
in Chennai, real estate activity is
growing so rapidly that the city
may be reclassied as a Tier I city
in the near uture.
InDIa’s CITy TIers
is there lie beyond the metros or indian retailers? actually
there is. here is a look at the most promising emerging retail
destinations o india, rom indore and jaipur to goa and
raipur. excerpts rom a jones lang lasalle meghraj report.
TIER I TIER II TIER III
D el hi C he nn ai L ud hi an a
Mumbai Hyderabad Mohali
B an ga lo re Pu ne J ai pu r
– Kolkata Udaipur
– – Indore
– – Ujjain
– – Bhopal
– – Jabalpur
– – Nagpur
– – Bhilai
– – Raipur
– – Vadodara
– – Surat
– – Nanded
– – Goa
– – Vijayawada
– – Coimbatore
– – Kochi
– – Thiruvana-nthapuram
– – Guwahati
While India is one of the rst
nations to emerge from the global
nancial crisis of 2007, its propertymarket is not emerging without scars.
Across all property asset classes,
none has felt the pain more thanretail. Hardly a week went by in
2008 and early 2009 without some
announcement of retailers scalingback operations, mall projects being
cancelled or shelved, and investors
pulling out of projects.Mid-2009 was a turning point
for the Indian economy. As the
retail sector returned to stability,the condence level of retailers
and investors was renewed. Malldevelopers and operators also tooka wiser approach to new projects in
terms of design, management and
location. Offering quality, well-managed retail space to under-served
markets was a recipe for success that
the wise capitalized on early.
As a new decade begins, India’s
retail sector moves beyond infancy,where organized retail was just
beginning to get a foothold in
major metros, to adolescence whereorganized retail has penetrated deeper
into Indian markets. In order to
understand the opportunities in theretail property market as the Indian
retail sector progresses in its path
of maturity, one needs to go off thepath so often taken by developers,
investors and retailers, both domestic
and foreign. An exploration of markets
off the beaten track will reveal wherethe new geography of opportunity lies
in the Indian retail property market.For the purposes of our analysis,
we have looked beyond India’s top
7 metros to focus on a selection of
20 markets that are in various stagesof retail maturity. We examine the
changing plot of the Indian retail story
and assess the lessons learned and
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new trends as a result of the global
economic downturn. Our examination
of these 20 markets also goes intocategorizing them into levels of
maturity and places that information
against current rental levels to
assess which ones pose the greatest
opportunities for developers, investors
and occupiers.
The resIlIenCy O COnsumerIsm
As in many nations, retail
consumption in India was severely
impacted as a result of the global
economic downturn. Now that the
nation’s economic recovery is well
under way, it is becoming apparent
that the underlying factors which
propelled India’s high-octane
consumerism in the past remain truetoday:
• Demographics are still favourable
with two-thirds of the nations
population below age 35
• Urbanization is still rapidly
occurring, and at a greater depth
with many Tier III and Tier IV
cities providing concentrations of
retailing potential
• India’s economy seems
unstoppable, suffering only a
slowdown in the rate of growth
during the global economic crisis
while others contracting
Net Domestic Product & Monthly Per Capita Consumption in India
Source: Ministry o Statistics and Programme Implementation, Government o India
*: Non-ood includes clothing & ootware, durable goods, education, uel & light, rent, taxes and misc. goods & services
• India’s middle-class is still growing
as are per capita incomes and the
availability of credit.
• The depth and breadth of
organized retail penetration
beyond India’s major metros is
still continuing into markets which
offer favourable opportunities for
retailers and property developers.The Indian retail market stood at
USD 330 bn in 2007 with little more
than 4 percent of it being attributed
to the organized retail sector. By the
end of 2010 the organized segment
is to grow to 10 percent of total
retail within the country. This rapid
growth of organized retail is partially
attributed to the phenomenal burst
of new shopping malls built over the
last three years, an increasing number
of which are located in the nation’s
smaller, under-served markets.
However, organized retail is also being
driven throughout India by resilient
consumers who are typically young,urbanized and brand-conscious
shoppers with changing preferences
towards consumerism.
reTaIl In nOn-meTrO markeTs
The retailing landscape varies
signicantly across India as markets
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differ greatly in size, maturity and
purchasing power. Developers and
operators of retail property in smaller
Indian markets need to be cognizant
of the variations that exist between
metros and non-metros as they plan,
build and operate shopping malls.
TypOlOgy anD Orm
The retail activities in India’s smallercities are typically known by their
traditional markets – bazaars and
fairs – which have over eons served
as crossroads for retail and wholesale
trade, barter and entertainment,
much like souks in the Middle
East. Historically, these stretches
of urban patch provided “shopping
entertainment” for traders and
consumers. Indeed, the traditional
markets, which contained the bazaars
and fairs, have played a pivotal role in
the origin and growth of these cities.In present-day emerging cities,
shopping areas display some common
trends that can be discerned and
discretely classied into non-exclusive
categories of CBD-Linked Street,
Arterial Street, Afuent Market
or Landmark Adjacent Market.
Shopping areas in emerging cities
have historically been formed along
important transport corridors or trade
routes. As these cities evolve, new
routes and neighborhoods provide
fertile ground to develop new age,
organized retail destinations. MR-10
in Indore is one such example of a
new transport corridor around which
clusters of new residential and retail
settlements have developed as the
population has grown.
keys TO suCCess: plannIng,
DesIgn, OperaTIng & IrsT-mOver
aDvanTages
The rst shopping centres developed
in India’s emerging cities witnessed
an unprecedented level of interest
from consumers and became the
primary destination for shopping,
eating and entertainment. A lack
of entertainment options and an
inconvenient retail environment
caused by lack of parking, crowdedlanes and uncomfortable weather,
made the rst such developments in
each city very successful. First movers
into cities such as Indore (Treasure
Island, 2005), Surat (Iscon Mall,
2008) and Vadodara (Central Mall,
2008) witnessed healthy footfalls
and sales volumes. These pioneering
developments provided the means
for national and international brands
including Pantaloon, Westside, Levis
Strauss, Big Bazaar, Nike and PVR
to penetrate into India’s untapped
markets.
The TraDITIOnalmarkeTs InCluDIng TheBazaars anD aIrs havehIsTOrICally playeDa pIvOTal rOle In TheOrIgIn anD grOwTh OCITIes aCrOss InDIa.
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A rst-mover advantage, while
critically important, is not sufcient
to guarantee the success of mall
projects in emerging cities. Another
essential factor is the ability toprovide cost-effective space solutions
for retailers. Effective utilization of
FSI is crucial in containing capital
expenditure. Shopping activities
diminish signicantly at upper levels
as shoppers tend to avoid climbing
extra oors and vertical transportation
adds to project development costs. An
ideal conguration is one in which
malls restrict retail and entertainment
activities within the rst three
levels of the property and utilizes
the remaining FSI for hospitality,
healthcare and lifestyle activities such
as gyms and salons, thus making
the location a centre of multipurpose
activities and enhancing critical
footfalls for retailers.Operational issues, while not
different from malls found in India’s
metro cities, take on an even greater
importance in emerging cities. A
judicious tenant mix, carefully
controlled operational costs (CAM),
revenue sharing models, and store-in-
store concepts to allow smaller, local
brands to have a presence in malls are
some of the issues that mall operators
must address to ensure a project’s
long-term viability.
The number and size of malls
that a given market can absorb will
vary from city to city. As with larger
metros, retail market dynamics
of non-metro cities can differ
signicantly. Smaller, nascent citiesdon’t offer adequate trade volumes
to experiment with a single, large
“mega-mall”. Rather, a greater number
of smaller-sized malls, ranging
from 200,000 to 400,000 sq.ft. and
strategically dispersed throughout
the city would be more suitable.
Other non-metros, such as Indore,
can accommodate signicantly
larger projects such as Treasure
Island, an integrated development
with 700,000 sq.ft. of retail space.
In planning the appropriate size andlocation for mall projects within
non-metros, developers need to take
into consideration numerous factors
that will impact the success of their
project, including the following:
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• Demographics and income levels
• Connectivity and proximity
to local destinations such as
tourist attractions, education and
health hubs, and commercialdevelopments
• Presence of competing retail
centres and high streets
• Consumer behavior patterns
including share of wallet across
product categories and frequency
of shopping
• Expected geographic growth
patterns of their city
• Changing consumer proles and
increasing levels of afuence.
20 reTaIl DesTInaTIOns TO waTCh
In 2007, Jones Lang LaSalle’s World
Winning Cities Research Programme
published a landmark study on the
Indian retail sector entitled “The
Geography of Opportunity – The
India 50”. In that report, 50 Indian
cities were classied into 5 categories
based upon the socio-economic
fundamentals, retail demand and
retail supply found within those
markets.
As the retail industry in India
matures and looks for new growth
The nexT Three CaTegOrIesO reTaIl ClassIICaTIOn– hIgh grOwTh, emergInganD nasCenT – Is whereThe aCTIOn wIll Be asreTaIlers anD DevelOpersenDeavOur TO Deepen TheIrunDersTanDIng O ThesemarkeTs anD CapITalIzeOn The OppOrTunITIes ThaTThey presenT.
strategies in the wake of the global
economic downturn, we felt a fresh
look at our analysis was appropriate.
While the methodology employed and
factors considered for classicationremained the same in our most recent
analysis, we expanded the set of cities
that we considered.
Our results reveal that the set
of cities in our top two categories,
Mature and Transitional, have not
changed from our original analysis.
Retail in these top eight markets
is fairly well understood and
documented, and these cities no
longer represent the frontier of retail
in India.
Conversely, the next three categoriesof retail classication – High Growth,
Emerging and Nascent – is where
the action will be as retailers and
developers endeavour to deepen their
understanding of these markets and
capitalize on the opportunities that
they present. While a large number of
Tier III cities in India can be placed
in one of these three categories, we
have limited our discussion to 20
markets which we feel best illustratethe characteristics of the category
based upon consumer proles, market
characteristics and developer activity.
hIgh-grOwTh CITIes
InDOre
Indore, the commercial capital of
Madhya Pradesh, is the centre of
business and trading activities in
Central India. While the city is also
known for its textile industry, Indore
is undergoing fast-paced infrastructuredevelopment to match the future
demand from other industrial sectors.
The state and local government
are undertaking several initiatives
to promote Indore as a premier
destination for investment.
Being a historic city, Indore has a
distinct core (old city) with newer
developments spread spatially
around in a concentric manner.
Residential, retail and institutional
areas dominate the city core in which
wholesale markets are prevalent andtraditional high streets dominate the
retail landscape. Khajuri Bazaar and
Kothari Market are located on M.G.
Road, which, along with Jawaharlal
Nehru Road, dened the retail hub
of the city before the emergence of
markets adjacent to Palasia Chauraha
and Bombay Hospital. Presently, a
signicant amount of retail activity is
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occurring in the central and eastern
parts of the city close to the high-end
residential locations such as Palasia,
Race Course, Saket, Gulmohar as
well as the upcoming locations suchas Vijay Nagar, MR 10 and Indore
Bypass.
A high number of afuent
entrepreneurs who reside in Indore are
driving the demand for local brands
along with national and international
retailers. Older, unorganized high
street markets are slowly giving way
to organized retail with the arrival of
new malls and shopping centres in
the city.
Approximately 1.7 mn sq.ft. of retail
space currently exists in Indore withanother 2.5 mn sq.ft. expected in the
next few years as 3-4 mall projects
have been announced. With several
prominent retailers considering
venture in the city, organized retail
has a bright future in Indore.
JaIpur
Jaipur, the capital of Rajasthan, is
a major international and domestic
tourist destination as part of India’s
Golden Triangle tourism circuit.Proximity to Delhi and Gurgaon is
helping to fuel both tourism and retail
activity in Jaipur. Economic growth,
rising disposable incomes and a
changing socio-economic environment
have led to the expansion of urban
spaces around the city with suburban
and peripheral locations becoming
the focus of development. Arterial
roads, such as M.I. Road and
Sansar Chander Road have becomefully commercialized for retail and
wholesale trade.
Jaipur is the rst city in Rajasthan
to have experienced modern
shopping plazas and multiplexes.
Approximately 10 shopping mall-
cum-multiplexes, totalling 800,000
sq.ft, are operational at various
locations in the city, with another 15
in the developing or planning stages.
Upcoming integrated townships
within Jaipur’s suburbs and along its
growth corridors also have a retailcomponent as a part of their product
mix. Major malls currently operational
in the city include Crystal Court, Mile
Stone, Mall 21, Silver Square, Crystal
Palm, City Flex, MGF Metropolitan
and Silver Square.
Retail spaces have a high rate of
absorption in Jaipur with major
brands and anchors such as Shoppers
Stop, Blackberry, McDonald’s and Big
Bazaar taking up space. There may
be a temporary oversupply condition,
but it is likely to get absorbed by
organized retail spaces offering
JaIpur Is The IrsT CITy InraJasThan TO experIenCemODern shOppIng plazasanD mulTIplexes. arOunD10 shOppIng malls-Cum-mulTIplexes areOperaTIOnal aT varIOuslOCaTIOns
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unique shopping experiences and
an increasing population as Jaipur
continues to mature as a commercial
destination.
kOChI
Kochi, also known as Cochin, is the
commercial capital of Kerala and
has historically been an important
port city in India. As a major tourist
destination and the gateway to
Kerala’s backwaters, Kochi has
witnessed growth in medical tourism
and eco-tourism, along with a boom
in its local IT/ITES sector, elevating
the city into an important investment
destination in South India.
As with other emerging cities inIndia, retail activity in Kochi has
traditionally been concentrated on a
central high street, with M.G. Road
being the dominant retail corridor of
merchants dealing in gold, textiles
and various other items. Marine
Drive, a more recent retail destination,
is challenging M.G. Road as the
preferred high street in Kochi, as
are the areas of Vytilla Junction,
Palarivattam and Edapally.High street dominance is about
to change in Kochi with a variety of
new retail formats being developed
throughout the city. The North-South
National Highway 47 bypass is being
transformed into a mall corridor.
Presently the city has one functional
mall and six malls are under various
stages of construction including a
1mn sq.ft. project by the Lulu Group.
Other builders such as Prestige
Group, Aerens Group, Abad Builders
and Emkay Group are working on
mall projects that will be of various
kOChI has wITnesseDgrOwTh In meDICalTOurIsm anD eCO-TOurIsm,alOng wITh a BOOm InITs lOCal IT/ITes seCTOr,
elevaTIng The CITy InTOan ImpOrTanT InvesTmenTDesTInaTIOn In sOuTh InDIa.
standards, specialities and use
formats.
luDhIana
Ludhiana, known for its hosieryand sporting goods industries, is
the most populated city of Punjab.
The service sector, which includes
nancial, banking and public services,
also plays an important role in thecity’s economy. Good connectivity
with major cities and an encouraging
business environment has made
the city the favourite investment
destination of the state.
Ferozpur Road is the main growth
corridor for retail and commercial
development in Ludhiana, in addition
to being a well-known, high-end
residential destination. Punjab
Agricultural University, Hotel Majestic
Park Plaza (the only 5-star hotel in the
city) and the Feroze Gandhi Market
(the only organized commercial centre
of Ludhiana) are located along this
major artery.
Over the past couple of years,
Ferozpur Road has witnessed major
developments in the organized retailsector with Ansal Plaza, Flamez
Mall and Westend Mall becoming
operational. This is mainly a result
of its proximity to the city centre and
posh residential colonies, presence of
prominent hotels, and the declining
popularity of Mall Road (the city’s rst
organized retail corridor) among the
retailers and consumers for its scarce
parking facilities.
Arterial development together
with improving infrastructure has
facilitated the growth of the realestate market in Ludhiana. The
entry of established players has
induced competition into the market,
thereby leading to a renewed focuson quality real estate projects.
Numerous national and local
developers including Ansal API, DLF,
MBD Group, Omaxe and Chadha
Group have proposed further retail
developments along Ferozpur Road.
mOhalI
Mohali can be regarded as a planned
extension of the city of Chandigarh.
Residents of this town are compelled
to travel to Chandigarh to shop due
to a shortage of quality local retail
destinations. The main markets of
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Mohali have been developed as sector
markets, as the cities of Chandigarh
and Mohali are collectively divided
into 74 sectors.
Many of Mohali’s sector marketsare located on a straight road from
Sector 58 to 65. Most of the ground
oor space in this retail corridor has
been occupied by local merchants
including restaurants, grocery shops,
departmental stores, jewellers, white
good showrooms and banks.
The Punjab Urban Planning &
Development Authority (PUDA) is
developing the Sector 70 market
to entice Mohali residents to shop
locally. Underlying factors including
a large segment of population inthe higher socio-economic proles
seeking residential options in the
region, proximity to Chandigarh, and
initiatives taken by the Government of
Punjab to promote industrial and IT/
ITES development are likely to have
a positive impact on Mohali’s retail
development.
Shalimar Mall and Mall Matrix, with
a combined area of 300,000 sq.ft., are
the rst malls proposed in Mohali. Six
additional malls are in various stages
of construction. These projects, along
with others that have been planned,
could add an additional 5.5 mn sq.ft.
of new retail space.
suraT
Surat, renowned for its textilemanufacturing and diamond
cutting/polishing industries, is a
major industrial hub in Gujarat.
Industrialization has not only boosted
the local real-estate market but has
also drawn an inux of migrants
from neighbouring cities. Rising
population and income, along with an
optimistic employment outlook, will
continue to boost retail development
in Surat which is ush with afuent
consumers.
Excellent road connectivity hasencouraged retail mall development in
outlying areas such as Piplod, Vesu,
Varachha Road and near Udhana
Navasi Road. The most preferred retail
destinations in the city are Dumas
Road, Parle Point, Ghoddod Road,
Piplod and Ring Road.
Well-known brands have not only
entered Surat but have also expanded
with multiple outlets in the city.
Surat has several retail investments
from major domestic brands such as
Croma, @ Home, Reliance Fresh, Big
Bazar and Shoppers Stop.
Existing retail space in Surat totals
to approximately 600,000 sq.ft. With
three to four malls in the planning
stage, another 560,000 sq.ft. of new
retail space is expected to enter the
market.
vaDODara
Vadodara lies along Gujarat’s
golden corridor which extends fromAhmedabad to Vapi. The city is one
of India’s foremost industrial centres
with dominant groups of chemicals
and pharmaceuticals manufacturers.
The centre of Vadodara is
dominated by residential, commercial
and institutional districts. Wholesale
markets and high-street retail areas
dominate the retail typology in this
core area of the old city and adjacent
areas. Here, Vadodara’s traditional,
established markets can be found
along the prominent shopping
corridors of Mahatma Gandhi Road
InDusTrIalIsaTIOn InsuraT has nOT OnlyBOOsTeD lOCal realesTaTe markeT BuT hasalsO Drawn mIgranTs
rOm neIghBOurIngCITIes.
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vaDODara’s emergIngCOmmerCIal anD reTaIlDIsTrICTs are prInCIpallylOCaTeD On The wesTernsIDe O The CITy. rC DuTTrOaD, raCe COurse rOaDanD OlD paDra rOaDhave emergeD as amOusCOmmerCIal DesTInaTIOnswIThIn The CITy.
(Nyay Mandir Gate to Mandavi
Gate), Raopura Road, Rajmahal Road,
Mangal Bazaar and Dandiya Bazaar.
Vadodara’s emerging commercial
and retail districts are principallylocated on the western side of the
city’s railway line. R.C. Dutt Road,
Race Course Road and Old Padra
Road have emerged as the prime
retail and commercial destinations
within the city. A majority of national
and international brands operating
in Vadodara are primarily located
along these roads. The predominant
typology of retail developments found
here are commercial complexes with
retail space on the lower ground and
upper ground oors with ofce spaceabove. Approximately 4.6 mn sq.ft. of
retail space is operational in Vadodara
with another 1 mn sq.ft. of new retail
space expected to enter the market
in the next few years as additional
projects are in various stages of
planning and development.
COImBaTOre
Coimbatore, a key industrial city
in South India, is regarded as the
preferred IT destination in Tamil Nadu
after Chennai. Several private sector
initiatives in the city have contributed
to an increase in real estate activity
in the region. Since commercial
establishments already have theirpresence in the CBD of the city, located
at the high density areas of RS Puram
and Race Course Road, new commercial
locations have been encouraged to set
up along major corridors towards the
outskirts of the city.
Coimbatore has its traditional retail
markets on Oppankara Street and
Cross Cut Road where both wholesale
and retail businesses are conducted.
Other retail markets can be found in
and around the residential locations of
Avinashi Road, Race Course Road and
100 Feet Road.
High streets such as BharathiyarRoad, Avinashi Road, Mettupalayam
Road and Cross Cut Road are currently
the main retail hubs of the city.
Brands including Ford, Nokia, Philips,
Hyundai, Sony, Bajaj,and Hero Honda
presently have their showrooms
scattered across these markets while
the likes of Zodiac, Lee, Nike, Reebok
and United Colors of Benetton are
found in RS Puram.
gOa
The state of Goa, located along India’sWestern coast, is the nation’s foremost
tourist destination. A steady growth
of tourist arrivals, both foreign and
domestic, has resulted in the state
achieving rapid economic growth.
The northern part of the state has
seen greater relative prosperity,
infrastructure development and early
commercialisation. South Goa has
provided the region with a dynamic
hospitality industry including a
number of ve-star deluxe hotels
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typology found in Goa is high street
shopping with major clusters located
near Main Avenue, Dr. A.B. Road,
18th June Road, and M.G. Road.
Being a tourism hub, theretail markets in Goa are largely
unorganized and are located at the
beach towns of Baga, Candolim and
Calangute, with the latter two having
well-developed high streets that are
home to high-end brands. While mall
developments are yet to come up,
a number of multi-storied shopping
centres are underway in Goa. A
further two retail developments (OsiaMall and Prot Centre) are proposed
in Margao and will total 100,000 sq.ft.
retail space.
nagpur
Nagpur, the largest city in central
India, is also the third most populous
city of Maharashtra. The city’s retail
market has existed in an unorganized
form in areas such as Itwari and
Sitabuldi, and in a semi-organized
form in the western part of the city.
These markets typically developed
near high-end residential settlements
where residents belonging to
Nagpur’s trading class possessed a
high propensity to spend. The city’s
established prime retail areas include
Dharampeth, Ramdaspeth, Gokulpeth,Central Avenue, Gandhibagh, Sadar,
and Sitabuldi, with locales such as
Wardhaman Nagar, Wardha Road, and
Khamla having been identied as high
potential areas.
Six malls are currently operational
in Nagpur. The city’s planning
authority is working with private
developers to ensure balanced retail
development in Nagpur. Large scale
projects such as MIHAN (Multimodal
International Hub Airport at Nagpur),
a proposed IT SEZ, and ButiboriIndustrial Estate have lead to an
increased demand in the residential
sector, which in turn has generated
demand for retail and commercial
spaces in the city. An ongoing IT/
ITES boom has also led to the inux
of young migrants who demand
organized retail outlets and have a
willingness to pay.
The past few years have seen
an emphatic transformation in the
number of retail brands that have
come into Nagpur. Retailing itself hasundergone a considerable shift, and
more can be expected in the near
future as traditional markets slowly
give way to organized retail formats.
The existing 1.5 mn sq.ft. of existing
retail space in Nagpur is expected to
double as three to four malls are beingplanned or developed.
raIpur
Raipur, a major trading and business
hub for the entire Chhattisgarh region,
has a large number of specialized
markets for various commodities. A
majority of these traditional markets
are located in the centre of the city
with newly emerging retail areas along
the Grand Eastern Road (NH-6). The
stretch on NH-6 between Tati Bandh
to Teli Bandha has emerged as the
most active retail destination in the
The exIsTIng 1.5 mn sq.T. O exIsTIng reTaIl spaCe Innagpur Is expeCTeD TO DOuBle as Three TO Our mallsare BeIng planneD Or DevelOpeD
along its coast-line. Panaji, the CBD
of Goa, comprises a signicant part of
Goa’s retail market.
With its year-round ow of
international and domestic tourists,Goa is a small but signicant
retail destination. Retail real estate
development is concentrated along
three of the city’s major arteries: A. B.
Road, M.G. Road and 18th June Road.
International and domestic brands are
located along M.G. Road, while local
retailers are concentrated on 18th
June Road. The predominant retail
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OrganIzeD reTaIl IswIDespreaD ThrOughOuTuDaIpur wITh Durganursery rOaD, shakTInagar anD suDkhaDIaCIrCle havIng The largesTCOnCenTraTIOn O newenTranTs. a seleCTIOn OTOp BranDs Is presenT InThe CITy
recent years whereas Sharda Chowk
and Jaistambh Chowk are noteworthy
markets in the city centre.
A few small, unorganized shopping
centres have been completed over thepast few years with Raipur getting
its rst shopping mall, City Mall 36,
followed by two or three more in
recent years.
TrIvanDrum
Trivandrum, the capital of Kerala, is
the second largest city in the state and
home to a large population of urban
professionals. Technopark, a 340 acre
IT park located in Trivandrum, is one
of the largest IT parks in India with
150 marquee IT rms and over 20,000employees.
Large-scale employment
opportunities such as this are a major
part of the reason that Trivandrum
witnessed a 42 percent increase in
population during 1991-2001 and
why it is ranked second in the state
of Kerala in terms of market potential
and afuence.
Trivandrum’s central business
district is also the heart of the city’s
traditional retail district with Palayam,
Chala and East Fort being the 3
most prominent markets. M.G. Road
and the area between Pattom and
Kesavadasapuram are the growth
corridors of retail in the city. Kedaram,
Karimpanal Arcade and Attukal
Shopping Complex are some of the
noteworthy shopping destinations
within the city.
The suburbs, which are residential
in nature, currently only haveneighbourhood format retail stores.
While retailers have land banks
in the suburban areas (in close
proximity to Technopark), no major
development has taken place yet to
explore the potential of this area. Only
58,000 sq.ft. of retail space exists in
Trivandrum.
uDaIpur
The lake city of Udaipur is a
popular tourist destination in India.
Historically, retail markets in Udaipur
have been an integral part of the city.
As Udaipur grew beyond the banks
of its lakes, major transportation
arteries developed into retail corridors.
Retail high streets continue to be
xture along Bapu Bazaar, Chetak
Circle, Suraj Pole, Ashwini Bazaar,
Nehru Bazaar, Bada Bazaar, ShastriCircle, Delhi Gate, Sindhi Bazaar,
Town Hall and Chand Pole. These are
complimented by specialized high
streets at Ghantaghar Market Udaipur
(jewellery), Malda Estate (apparel)
and Hathi Pole (antiques).
Organized retail is widespread
throughout Udaipur with Durga
Nursery Road, Shakti Nagar and
Sudkhadia Circle having the largestconcentration of new entrants.
A wide selection of international
and domestic brands is present in
Udaipur across numerous categories
of retail with Nokia, Adidas, John
Players, Levi Strauss and Pizza Hut
already having a presence in the city.
Domestic supermarkets such as Big
Bazaar and Reliance Fresh have also
established themselves in prominent
locations within Udaipur. Movie
theatres, both new (Fun Cinemas) and
reconstructed (Paras Cinema) are also
well represented in the city.
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nasCenT CITIes
BhIlaI
Bhilai, the second largest city in thestate of Chattisgarh, is known as the
steel capital of India. Home to India’s
largest steel plant, SAIL, Bhilai is one
of the most industrialized sectors of
the state.
The inux of professionals working
at SAIL has added a cosmopolitan
avour to the local culture of the city
and spurred demand for organized
retail. Bhilai is ranked as the top
city of Chhattisgarh state in terms of
market potential and afuency.
NH-6 is the central retail corridorin Bhilai with major developments
located around the main junctions of
the highway. Among the city’s sectoral
markets, the City Centre and Sector-6
markets are the most popular.
The format of retail developments in
Bhilai is mostly high street in nature
with some mixed-use retail-and-ofce
complexes found in projects such as
Chauhan Estate and Dhillon Complex.
A few brands such as Raymond,
Reebok, Titan, Koutons , Gini & Jony
and Peter England can be found in
markets along NH-6 such as Supela
Chowk and Akash Ganga.Retail projects in the upcoming
areas of Bhilai typically do not have
an independent existence but can be
located in the ground and rst oors
of residential apartments. These are
mostly full service departmental
stores. Although there are no
multiplexes in Bhilai, some traditional
cinema halls including Venkatesh,
Maurya and Chandra have upgradedthemselves to cater to the city’s
present needs.
Presently, the city of Bhilai does
not have any shopping mall although
a 690,000 sq.ft. project is being
developed by Entertainment World
Developers.
BhOpal
A few malls are under construction
or planned in prominent areas of
the capital city of Madhya Pradesh.
Various mixed-use commercialcomplexes in the city currently
showcase a few brands. Organized
retail exists to a limited extent in
scattered areas of Bhopal in the form
of some supermarket chains.
The area around Hoshangabad
Road is also fast developing into a
commercial sector. Approximately
240,000 sq.ft. of retail space exists in
Bhopal.
whIle The sIze O nOn-meTrOs Is relaTIvelysmaller, They shOulDnOT Be wrITTen O ByreTaIlers. nOr shOulD allemergIng CITIes Be paInTeDwITh The same Brushas There exIsTs a greaTDeal O varIaTIOn In ThepurChasIng pOwer anDaluenCe levels O ThesemarkeTs.
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guwahaTI
Guwahati, the capital city of the
state of Assam, is the gateway to
the north-eastern states of India.
The petroleum and tea industriesdominate the Guwahati economy
which is the centre of culture,
politics, and commerce for the entire
region. An inux of migrants over
the past decade has caused the city’s
population to swell by more than 40
percent and provided a boost to the
development of the region.
Retail markets were traditionally
conned to the city centre in
Guwahati with areas such as Pan
Bazaar, Paltan Bazaar and Fancy
Bazaar being the most popularmarkets. Arterial thoroughfares
eventually developed into retail
corridors, with the G.S. Road
becoming the most prominent.
Departmental stores, supermarkets
and large format stand-alone stores
are the most popular retail formats
in Guwahati. With the development
of the shopping malls and plazas,national and international brands
have started to migrate from high
streets into malls.
Big Bazaar (stand-alone), The Hub,
Cube Mall, Dona Planet and Sohum
are some of the existing brands and
organized shopping areas in the city
of Guwahati.
An additional 600,000 sq.ft. of
retail property development has
been proposed for development in
Guwahati, most of it along G.S. Road.
JaBalpur
Jabalpur, with 1.2 million residents,
is one of the wealthier cities in the
state of Madhya Pradesh. It is the
headquarter of many important
Central and State departments which
employ thousands of government
workers. Jabalpur serves as a
distribution centre for a wide variety
of products and natural resources
from all over. Its relative prosperity
has caused it to be ranked third in the
state in terms of market potential andafuence.
Residents of Jabalpur, who have
relatively higher disposable incomes,
are limited to shopping at the
traditional markets of Soni Bazaar,
Madhital and Sadar Market. Treasure
Island (Jabalpur), a 680,000 sq.
ft. retail project, has added a new
dynamic to the local retail landscape.
nanDeD
Nanded, a religious hub to India’s
Sikh community, has one of most
prominent Gurudwaras in the country.
DeparTmenTal sTOres,supermarkeTs anDlarge OrmaT sTanD-alOne sTOres are mOsTpOpular reTaIl OrmaTsIn guwahaTI. wITh TheDevelOpmenT O shOppIngmalls anD plazas, BranDshave sTarTeD TO mIgraTerOm hIgh sTreeTs InTOmalls.
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It draws more than 1 million tourists
annually and is the agricultural,
educational and healthcare hub of the
region.
As a trading and business centre fornearby towns and rural hinterland,
the city of Nanded has well-
established retail markets. Station
Road, Vazirabad, Shivaji Nagar and
Doctors Lane are the prominent retail
and commercial hubs of the city.
vIJayawaDa
Vijayawada, the third largest city
in Andhra Pradesh, is a hub of
commercial activity with a strong
educational infrastructure and ITindustrial base. Retail districts in
Vijayawada have traditionally been
concentrated along Shivalayam Street
and Samarangam Chowk, which form
the older part of the city. Alternative,
modern forms of retail business have
started appearing along Mahatma
Gandhi Road (erstwhile Bandar Road),
Besant Road and, to an extent, along
Karl Marx Road (erstwhile Eluru
Road). Vijayawada’s retail landscape
is expected to undergo furthertransformation as organized retail
projects are already under construction
along Mahatma Gandhi Road, Old
Bus Stand area and Gandhinagar, with
additional projects being proposed,
potentially propelling these areas to the
prime retail districts of the city.
eCOnOmIC aCTIvITy In
uJJaIn Is DrIven By The
agrICulTural InDusTryOr whICh The CITy
serves as a regIOnal
whOlesale markeT. The
CITy reCeIves a large
numBer O TOurIsTs
ThrOughOuT The year.
ThIs Is supplemenTeD By
amOus relIgIOus aIrs
ThaT Draw up TO hal a
mIllIOn pIlgrIms.
uJJaIn
As a city of great cultural and religious
importance, Ujjain receives a large
number of tourists throughout the
year. This is supplemented by famous
religious fairs that draw up to half a
million pilgrims. Economic activity
in Ujjain is driven by the agricultural
industry for which the city serves as a
regional wholesale market.Small, traditional shops dominate
the retail landscape in Ujjain. The
main market area of the city, adjacent
to Free Ganj Tower, is home to
domestic apparel brands such as Peter
England, John Players, Charlie Outlaw
and Raymond.
Gopal Mandir and Satigate are two
other prominent shopping districts
within the city.
Treasure Island (Ujjain), a 400,000
sq.ft. shopping mall on Dhanwantri
Chikisa Kendra, is a star attraction of
the city’s landscape.
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The rIghT markeT maynOT Be The OBvIOus Or
sae ChOICe. prOperTyDevelOpers musT lOOkBeyOnD InDIa’s 7 largemeTrOs anD IDenTIylOCaTIOns wITh The rIghTmIx O markeT maTurITy,reTaIl mOmenTum anDspaCe aOrDaBle OrBranDs. unlIke The rIghTmarkeT, The rIghT prOJeCTIs maDe, nOT DIsCOvereD.
OuTlOOk
While the performance of economies around the world
will certainly have an impact on India’s retail sector, the
stable footing it is on as a result of strong underlyingfundamentals in demographics, urbanization and a growing
middle class should provide reason for optimism.
Success is far from guaranteed for retail property
developers, however. For them it is critical to take the
lessons learned from the recent downturn and go forward
with a cunning eye for the right market and the right
project.
The right market may not be the
obvious or safe choice. Property
developers must look beyond India’s
7 large metros and identify locations
with the right mix of market maturity,retail momentum and space affordable
for brands. Finding markets with
sufcient retail potential (purchasing
power) where a rst mover advantage
may yet be realized is a recipe that
has worked well for developers such
as Entertainment World Developers
and may be imitated by others going
forward.
Unlike the right market, the right
project is made, not discovered.
Operators of organized retail need to
be vigilant in containing costs in non-
metro cities by employing innovative
techniques to maximize FSI throughmixed-use projects and keeping a lid
on CAM charges. Tenant mix, an issue
with any shopping mall project, needs
to take into account local preferences
for value versus premium retailers
and brands that represent a good
combination of international, national
and local merchants. Modestly-sized
malls which are strategically located
within a city and compliment, rather
than compete with, existing high
streets are the most likely to achieve
long term prosperity for developers,
operators and retailers.