Top 10 Indian Cities - Potential for retail led real estate development

Indian cities with retail led development potential

If you were a real estate builder and wanted to build a shopping mall in India, which are the cities you would look at? To be honest, there cannot be just one holy mother of all lists of the top 10 Indian cities with the retail perspective. What we have here is a list that we have compiled out of our own working experiences, population densities, disposable incomes, conversations with developers and the eagerness of various retailers to include a city in their expansion plan.

The list of top 10 Indian cities in the retail perspective is also a reflection of the fact that there is a serious gap between the demand for organised retail and it's supply. Your grandma, while knitting that cardigan will tell you that when supply is way below demand, it is the correct scenario for one to build a shopping destination.

Top 10 Cities of India - For retail led development

1. Patna - This city has organised retail space demand. Ambiance and shopper experience is the key. So is that realistic rental figure. Don't ask for the moon per Sq ft. Approach retail brands that do not have local oulets by the hundreds. They would love to be in your mall in Patna.

2. Surat - A place with the best retailers, combined with easy parking, luxurious interiors and with a focus on food still makes sense. Building on one of the upmarket suburbs, with lower land costs and thus lower rentals for the retailer would make your development viable.

3. Ahmedabad - After the large and mega large retail developments are filled and operational, there will be space for mid sized, spaced out retail developments, catering to specific geographies. These shopping malls (if you build one) shall command the footfalls in the future.

4. Lucknow - There are malls in Lucknow and there are high streets. The picture looks complete till you take a closer look. A realistic look to be more precise. Size will matter here and building too small will not generate enough pull for your mall. Lucknow still needs that act of faith from a builder who can build something grand and cost effective. Luxury shopping still happens in Delhi for the affluent Lucknow resident. And that is a significant opportunity if you can lure the retailers with the right and equitable deal.

5. Kanpur - There are two or three developments there which thrive on large multi brand outlets primarily. But interviewing the locals tells us that specialist national retailers selling apparel (ethnic and contemporary), accessories, gadgets, consumer electronics and lifestyle products are in demand. Again, ambiance and shopper experience is the key.

6. Bhopal - Positioning the mall correctly in this city and having the right balance between retail, food and entertainment is the key to success in this city. And success shall come your way if you follow the writing on this city's walls.

7. Bhubaneswar - Build the right mall in this city with a focus on accessibility from Cuttack and you have a winner. Hands down. A good cinema brand is a must. So is a sprawling, club like area with F&B galore where the Odisha peeps can come and down some booze, eat their hearts out and be merry. Shopping will happen by default.

8. Vishakapatnam - A nice mid sized mall with the works. You would easily find investors for your space as well in case you wanted to sell some space and generate some cash flows rather than being on that very tough all lease model. The shopper experience is the key. Don't worry about the money to spare. It is there.

9. Nashik - A place where disposable income, if looked at closely is skewed towards a particular section of the people. But that, dear developer is enough to run your well planned mall into profits for a long time to come. The moneyed class there has an open mind and the ability to spend on brands. They need that place.

10. Ranchi - There are retail developments here that are nothing better than large multi branded outlets spanning large areas. That model, sadly has a very limited life span. Don't build for what is in immediate demand right now. That is like positioning a great car like the Nano in a patch, where no respectable guy would like to be seen driving one. Build something futuristic. You will find traction.

Note: The order in which these cities appear have nothing to do with their ranking or position in the top 10 list. Please consume this list as a whole. Yes, specific parameters will differ and tweaks in the kind of development that works best is a matter of more in depth study.

For more assistance about the same, get in touch with Kaushik. You can reach him at - kaushik@pillarsconsultancy.com

Cheers!

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