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Retail Sector in India gaining momentum

“Retail therapy works”!! Well, who doesn’t love shopping, and seeing the current retail sector growth scenario, we might get more bands entering the sector soon. The sector received more than US $0.7 billion of investment by PE firms/wealth funds in 2016. It is estimated that private equity investments in the segment are expected to increase by as much as 20% in 2017, signalling that overall market dynamics for the segment continue to be positive.

  • Approximately 40% of 3.4 mn sq. ft., of new retail supply, entered the Delhi / NCR market in 2016.
  • By the end of the year, many global retailers expanded their portfolio with multiple store-openings.
  • In 2017, we expect further positive movement for the segment. Close to 7 million sq. ft. of Grade A supply, is expected to enter the market.
  • We will see more global and national brands execute their entry and expansion strategy in many cities.
  • The demand for organized retail space will continue to exceed the supply in most leading markets.
  • Besides fashion and F&B, Family Entertainment Centers (FECs) and multiplex operators are also going to be active in leasing space at existing and upcoming malls in 2017.

Consumer psyche is changing due to increasing urbanisation and policy initiatives. With the advent of REIT’s in the near future, the quality of malls is expected to improve and the concept of strata sale of properties is expected to reduce considerably. With GST due to be implemented by July 1, 2017, we will also see a rationalisation of tax at different level as well as improvement in ease of doing business and overall movement of retail goods.

Source: India Retailing

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