Malls would have a larger catchment area in these Tier-II and Tier-III cities. Here's more!
Real Estate

Malls would have a larger catchment area in these Tier-II and Tier-III cities. Here's more!

Expansion of brick-n-mortar retail is also underway outside metros. Between 2006 and 2017, Tier-II cities reportedly received close to five times the investment of Tier-I cities, which <span style="font-weight: bold;">Anuj Kejriwal, Managing Director &amp; CEO, Anarock Retail</span> ascribes to 'investors and mall developers realising the potential of these smaller markets and trying to make their presence felt.' <p></p> <p>According to <span style="font-weight: bold;">Pratik Mantri, Director, Mantri Developers,</span> developers have been quick to spot the potential in Tier-II cities&nbsp;<span style="font-size: 13.3333px;">'</span>to gain first-mover advantage, as once a mall establishes loyalty through convenience it becomes hard to disrupt.'</p> <p>Demand-supply economics is at play in this growth. On the one hand, there is a 'dearth of quality malls, more so in Tier-II and Tier-III cities', to quote <span style="font-weight: bold;">Jayen Naik, Vice President-Malls, Nexus Malls.</span> On the other hand, the demand for retail space has spilled over to Tier-II and Tier-III cities, driven by 'an increasing consumer base with increasing spending potential', according to <span style="font-weight: bold;">Bimal Sharma, Head, Retail Services, CBRE.</span> </p> <p>To a certain extent, e-commerce has furthered the growth of malls especially in Tier-II and Tier-III cities, Naik believes, 'by generating interest in brands and pushing first-time trials by aspirational customers, which inevitably spurs the desire for an experience that only the brick-n-mortar format can deliver'.</p> <p>From the perspective of brands, the key drivers of retail space in Tier-II and Tier-III cities are the fact that 'these cities are hitherto uncharted locations and have relatively lower real-estate costs (compared to metros)', says Sharma. </p> <p>Tier-I cities are facing low vacancy levels, space saturation, crippled infrastructure and high rentals, adds Kejriwal, calling Tier-II and Tier-III the country's future growth engines with the potential for the market size to grow more than 10 times. He sees big prospects for retail expansion in Tier-II cities such as Lucknow, Coimbatore, Chandigarh, Mangaluru and Ahmedabad.</p> <p><span style="font-weight: bold;">Anshul Pahuja, Vice President, Business Development, Pacific Development Corporation,</span> cites Lucknow, Kanpur, Dehradun, Mathura, Agra, Jaipur, Chandigarh and cities in Punjab as some of the Tier-II cities with great potential. Sharma counts Jaipur, Chandigarh, Kochi, Bhubaneshwar and Nagpur as the retail sector's next happening destinations.</p> <p>But the bright prospects may well extend beyond these cities. 'In the next decade, we expect to see malls of about 4-5 lakh sq ft develop in every city with a population of about 500,000,' says Naik, relying on the 1:1 ideal ratio between the size of a mall and the size of the population in the catchment area to estimate the size.</p> <p>But if these malls would have a larger catchment area, larger even than malls in metros, they could be bigger. For instance, a mall in Mohali could attract visitors from the Chandigarh capital region as well as nearby cities in Punjab, Haryana and Himachal Pradesh, explains <span style="font-weight: bold;">Aashish Agarwal, Senior Director (Head-Consulting), Colliers International India, </span>provided it is developed as a destination.</p> <p></p>

Expansion of brick-n-mortar retail is also underway outside metros. Between 2006 and 2017, Tier-II cities reportedly received close to five times the investment of Tier-I cities, which <span style="font-weight: bold;">Anuj Kejriwal, Managing Director &amp; CEO, Anarock Retail</span> ascribes to 'investors and mall developers realising the potential of these smaller markets and trying to make their presence felt.' <p></p> <p>According to <span style="font-weight: bold;">Pratik Mantri, Director, Mantri Developers,</span> developers have been quick to spot the potential in Tier-II cities&nbsp;<span style="font-size: 13.3333px;">'</span>to gain first-mover advantage, as once a mall establishes loyalty through convenience it becomes hard to disrupt.'</p> <p>Demand-supply economics is at play in this growth. On the one hand, there is a 'dearth of quality malls, more so in Tier-II and Tier-III cities', to quote <span style="font-weight: bold;">Jayen Naik, Vice President-Malls, Nexus Malls.</span> On the other hand, the demand for retail space has spilled over to Tier-II and Tier-III cities, driven by 'an increasing consumer base with increasing spending potential', according to <span style="font-weight: bold;">Bimal Sharma, Head, Retail Services, CBRE.</span> </p> <p>To a certain extent, e-commerce has furthered the growth of malls especially in Tier-II and Tier-III cities, Naik believes, 'by generating interest in brands and pushing first-time trials by aspirational customers, which inevitably spurs the desire for an experience that only the brick-n-mortar format can deliver'.</p> <p>From the perspective of brands, the key drivers of retail space in Tier-II and Tier-III cities are the fact that 'these cities are hitherto uncharted locations and have relatively lower real-estate costs (compared to metros)', says Sharma. </p> <p>Tier-I cities are facing low vacancy levels, space saturation, crippled infrastructure and high rentals, adds Kejriwal, calling Tier-II and Tier-III the country's future growth engines with the potential for the market size to grow more than 10 times. He sees big prospects for retail expansion in Tier-II cities such as Lucknow, Coimbatore, Chandigarh, Mangaluru and Ahmedabad.</p> <p><span style="font-weight: bold;">Anshul Pahuja, Vice President, Business Development, Pacific Development Corporation,</span> cites Lucknow, Kanpur, Dehradun, Mathura, Agra, Jaipur, Chandigarh and cities in Punjab as some of the Tier-II cities with great potential. Sharma counts Jaipur, Chandigarh, Kochi, Bhubaneshwar and Nagpur as the retail sector's next happening destinations.</p> <p>But the bright prospects may well extend beyond these cities. 'In the next decade, we expect to see malls of about 4-5 lakh sq ft develop in every city with a population of about 500,000,' says Naik, relying on the 1:1 ideal ratio between the size of a mall and the size of the population in the catchment area to estimate the size.</p> <p>But if these malls would have a larger catchment area, larger even than malls in metros, they could be bigger. For instance, a mall in Mohali could attract visitors from the Chandigarh capital region as well as nearby cities in Punjab, Haryana and Himachal Pradesh, explains <span style="font-weight: bold;">Aashish Agarwal, Senior Director (Head-Consulting), Colliers International India, </span>provided it is developed as a destination.</p> <p></p>

Next Story
Technology

AirBrick Infra Sets Rs 1 billion Target, Expands to Dubai and Tier-II Cities

AirBrick Infra, one of India’s fastest-growing AI-led commercial interior design and build firms, has announced a sales order target of Rs 1 billion for FY 2025–26. The projection represents a 50 per cent growth over the previous fiscal year and reflects rising demand, increased repeat business, and the company's robust tech-first delivery model.  Now in its third year of operations, AirBrick continues its rapid scale-up, having successfully delivered over 70 projects spanning 3 lakh sq ft in FY 2023–24. FY 2024–25 witnessed the onboarding of several Fortune 500 clients, sett..

Next Story
Resources

Virtusa Foundation Powers Green Education Drive in Bengaluru

The Virtusa Foundation, CSR arm of digital engineering and technology leader Virtusa Corporation, has announced key infrastructure and mobility initiatives at the Ramakrishna Mission, Shivanahalli, Bengaluru. The launch marks the inauguration of a 16-room residential facility for lady teachers and the deployment of two solar-powered electric buses, underscoring Virtusa’s commitment to its core pillars of Education, Environment and Empowerment (3Es).  Located on the forest fringe near Bannerghatta National Park, the initiative supports tribal and underserved communities, complementi..

Next Story
Infrastructure Urban

Godrej Enterprises Drives India’s Smart Green Logistics Shift

As India accelerates its transformation into a global manufacturing and logistics hub, Godrej Enterprises Group (GEG) is taking the lead with its smart, sustainable intralogistics solutions. Through its Material Handling Equipment (MHE) and Storage Solutions businesses, GEG is redefining operational efficiency in modern warehouses and factories using IoT, automation, and AI. GEG has consistently maintained a 20–25 per cent market share in the intralogistics sector over the past three years. Today, over 37 per cent of GEG’s revenues come from its Good & Green portfolio, and its net..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?