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

01 Nov 2018 CW Team

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 Anuj Kejriwal, Managing Director & CEO, Anarock Retail ascribes to 'investors and mall developers realising the potential of these smaller markets and trying to make their presence felt.' According to Pratik Mantri, Director, Mantri Developers, developers have been quick to spot the potential in Tier-II cities 'to gain first-mover advantage, as once a mall establishes loyalty through convenience it becomes hard to disrupt.' 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 Jayen Naik, Vice President-Malls, Nexus Malls. 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 Bimal Sharma, Head, Retail Services, CBRE. 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'. 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. 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. Anshul Pahuja, Vice President, Business Development, Pacific Development Corporation, 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. 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. 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 Aashish Agarwal, Senior Director (Head-Consulting), Colliers International India, provided it is developed as a destination.

Infrastructure Urban

06 Jul 2026

ABS Marine Sees CRISIL Credit Rating Upgrade

ABS Marine Services has secured an upgrade to its long term and short term credit ratings from CRISIL, reflecting improved profitability and revenue growth through long term contracts. CRISIL moved the long term rating from BBB+/Stable to A-/Stable and revised the short term rating from A2 to A2+. The action signals strengthened financial metrics and operational resilience. The company benefited from durable client relationships with firms such as ONGC and Schlumberger. The rating decision followed stronger cash flows and an enlarged bank loan facility, which increased from Rs 3,705 million (m..

Project BRAHMANK Marks 16 Years Of Strategic Roads In Arunachal

Project BRAHMANK is marking 16 years of work to establish strategic road and bridge links across Arunachal Pradesh, maintaining and developing 811 kilometres of roads and nearly 86 bridges that range from small culverts to large steel and arch bridges. These transport links are described as critical for ensuring year-round movement of defence personnel, equipment and essential supplies while improving everyday travel for people in remote villages. The project balances national security requirements with regional development by focusing on reliable access in challenging terrain. Notable enginee..

Longleng CSOs Give One Week Ultimatum Over Two-Lane Highway

Civil society organisations (CSOs) in Longleng district have demanded immediate restoration of the deteriorating Changtongya–Longleng two-lane road and sought a detailed status report on the stalled construction within one week. The demand followed a consultative meeting convened under the Phom Peoples' Council (PPC) to discuss welfare and development concerns. PPC president YB Angam Phom said prolonged non-maintenance had caused hardship to commuters and affected transportation, local commerce and the district's development. The meeting urged authorities to undertake immediate restoration a..