new retail frontiers report

7/23/2019 New Retail Frontiers Report

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2014A Cushman & Wakefield Research Publication

NEW RETAIL

FRONTIERS: EMERGING

MAIN STREETS IN INDIA


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Table of ContentsEXECUTIVE SUMMARY

2WHAT IS AN EMERGING MAIN STREET?

1

3DRIVERS FOR EMERGING MAIN STREETS

4

KEY EMERGING MAIN STREETS

14ANALYSING RETAIL DYNAMICS INEMERGING MAIN STREETS

20OUTLOOK FOR THESE

EMERGING MAIN STREETS


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EXECUTIVE SUMMARY

Indian retail destinations are undergoing a metamorphosis;

established malls and main streets are becoming more

sophisticated as shopping destinations and a number of new

locations are emerging.This report delves into the potential of

such upcoming, new retail catchments and analyses each one

from a 360 degree view point. In our report, we have taken into

account the seven major cities of Mumbai, Delhi-NCR, Bengaluru,Chennai, Kolkata, Pune and Hyderabad.

The most natural reason for the emergence of new retail micro

markets is that Indian cities are now overflowing at helms,

leading to creation of new residential catchment areas. Retail

malls and main streets are perhaps the leading parameters of

social infrastructure. In a sense, this reflects the increasing

financial wherewithal of Indian consumers and their willingness

to make purchases.That said, there is no one-size-fits-all strategy

that works. Each micro market attracts a unique class of

shoppers and the main challenge of retailers is to tailormake

product mixes in order to best cater to the demand of theconsumers. For instance, High Street Phoenix in Lower Parel,

Mumbai and Phoenix Market City in Kurla, Mumbai are not and

could not be a replication of each other.Whilst the micro

market of Lower Parel can draw luxury shoppers, Kurla is

unlikely to.As is true for most real estate related business

decisions, location holds the key; structuring a business model

synchronized to the expected footfalls will be the deciding factor

of success or failure.

A specific interesting trend that we came across is that despite

global interest and international retail brands flocking to India,

foreign brands occupy insignificant space in emerging main streets

compared to domestic brands. Select main streets such as

Dwarka (Ashirwad Chowk) in Delhi NCR, NSC Bose Road in

Kolkata, and HSR Layout and Sahakar Nagar in Bengaluru have

witnessed sizeable penetration of foreign brands (above 20%

occupancy) reflecting the tastes of the catchment and the quality

of supply present here. However, main streets such as Kothapet in

Hyderabad, Kharadi in Pune and Ambattur (MTH Road) in

Chennai witnessed lesser levels of penetration from foreign

retailers. Another interesting fact is that across the main streets,

apparel and footwear brands had maximum penetration by area,

followed by the food and beverages (F&B) brands, alluding to

consumer preference when it comes to retail segments.

Emerging retail locations definitely have a cost advantage. On an

average, we estimate that rentals are 20-30% lower in these micro

markets when compared to established retail locations. Currently

Dwarka (Ashirwad Chowk) in Delhi-NCR commands the highest

main street retail rental, while Kothapet in Hyderabad commands

the lowest main street retail rental amongst the 14 new emerging

main streets.

The main factor that will drive growth potential is consumerpurchasing power and hence, a stable and confident job market is

essential. India is just coming out of a tepid job growth scenario,

which has eroded consumer confidence significantly.As Indias

macroeconomic statistics improve, people will feel more

comfortable and shop beyond their basic needs. Economic

indicators are now positive and retailers should identify and

establish bases in high-growth emerging locations and (in some

cases) benefit from first-mover advantages.

NEW RETAILFRONTIERS


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WHAT IS AN EMERGING MAIN

STREET?

Main streets initially develop in and around city nodes such as

near transport hubs, railway stations or at the heart of the city.

As the city expands its precincts, far-flung residential areas start

developing a mixed-use fabric along the streets. Select streets

start emerging and witness progressively higher footfalls, which

then lead to concentrated retail development along these

avenues. This report takes a look at such new and emerging main

streets that have evolved in recent years due to the development

of new residential pockets or densification of certain areas.

For the purpose of the study, we have concentrated on seven

major cities of Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai,

Delhi-NCR and Pune. These major cities are reeling under severe

urbanization pressures and their geographical limits are being

redrawn and extended to encompass the surging settlements. Two

new main streets, which have witnessed maximum activity level in

terms of enquiries and retail real estate transactions in last couple

of years, have been chosen from each of these cities for the study.

Post-conducting an extensive demand-supply analysis, we have

zeroed in on these new emerging main streets and will discuss

their characteristics and potential in the following sections.

2014

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DRIVERS FOR EMERGING MAIN

STREETS

DRIVERS FOR EMERGING MAIN STREETS

URBAN SPRAWL

TRANSPORT AND ACCESSIBILITY

Main streets have traditionally evolved as a communal hub, where

a wide variety of local shops are present in the prime locations.

Today, chaotic main street shopping co-exists with organised,

hassle-free and convenient mode of shopping in malls. Indianconsumers are also exploring different retail avenues such as

online shopping with home delivery options and click and collect

centres. Though the share of these alternative formats is slowly

increasing in India, shopping destinations such as main streets and

malls maintain their appeal as new locations emerge. The major

drivers facilitating the emergence of new main streets are:

Rapid urbanization and population explosion in India have led to

the emergence of new suburbs and satellite towns with alternate

commercial areas, around which, new retail neighbourhoods have

developed.Alternative retail options have started sprouting inthese far-flung locations in order to reduce the dependence of

residents on established retail hubs situated at the heart of the

city.As populations in the city are increasing through natural

growth and migration, retailers are increasingly looking at setting

up their outlets as close as possible to their consumers in order

to ensure that their markets expand.Whilst it is usually the local

and unorganised retailers who try and capitalise on the first

mover advantage in new and emerging retail locations, organised

retailers lead the pack in setting up outlets, typically belonging in

the food and beverages (F&B), mid-range fashion and accessories.

Increasing congestion in established retail destinations has

resulted in increasing the travel time and well as the travel cost

for fuel, parking, etc. Further, increased car ownership has

resulted in an increase in demand for adequate parking facilities

for shoppers, which has been difficult to cater to in established

main streets. Consequently, new retail streets that are easily

accessible through various means of transport have good

potential to mature into established main streets.

As the retail sector is increasingly getting organised through the

entry and expansion of organised retail players and retail real

estate developers, new retail markets are emerging across cities.

Organised retailers are not only setting up shop in traditional

retail markets, but are also seeking new emerging markets inorder to widen their buyer base. Further, unorganised retailers

are shifting from established retail markets as they are being

squeezed out by the organised retailers who pay higher rents.

Initially in the first 2 to 3 years, new main streets are dominated

by mom and pop stores, local tailoring, hardware, home

improvement, F&B and other stores as rents and capital values are

cheaper and organised players are not willing to take on the high

risks associated with these emerging new markets. However, as

these markets gain traction in terms of increasing consumer base

and availability of quality real estate options, organised players

(usually in the mid segment) start setting up shop.

The final yardstick of success of any retail outlet is the

profitability that retailers can expect in the retail destination.

Most brands have a set format for a retail store that includes the

size of the store, expected frontage, building quality, store

interiors (design and materials), etc. Thus, the fit-out costs are

standardized over all locations and the initial capital expenditure

is in similar range across the cities for a particular brand.As the

product pricing is also same across the country, the profitability of

a store is usually affected by the ratio of the average trading

density or the revenue earned to rent paid. Emerging main streets

are competing with established main streets by offering muchlower rentals and increasing revenue generating footfalls, which

make these locations pretty lucrative for brands.

INCREASING ORGANISED RETAIL

HIGH AVERAGE TRADING DENSITIES

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NEW RETAILFRONTIERS


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KEY EMERGING MAIN STREETS

Various market forces guide the development of new main

streets, each of which, witnesses a unique combination of growth

factors and hindrances or bottlenecks. In this section, we have

attempted to outline various market forces, which have shaped

the current retail landscape in the emerging main streets of the

seven cities under study.

2014

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HSR Layout (27th Main)

Located between Hosur Road and Sarjapur Road, two main

arteries of the city, HSR Layout 27th Main Street emerged as a

retail main street due to the residential pockets that have

mushroomed in HSR Layout because of the growth of IT-ITeS

hubs in Electronic City and along the south-eastern part of

Outer Ring Road. The residential catchment for this main street

includes Sarjapur Road, Jakkasandara, Hosur Road and the Outer

Ring Road (ORR) stretch near Sarjapur-ORR Junction. The lack

of malls and retail locations within a 5 kilometre radius and the

presence of a prominent educational institute - the NationalInstitute of Fashion Technology, have also acted as vital catalysts

for the emergence of this location. Further, the proposed metro

connectivity is expected to make this location more attractive in

future.

Sahakar Nagar

Formed as a co-operative housing society for government

employees, Sahakar Nagar today enjoys the benefit of being the

sole retail destination between Hebbal located about 3 kms away

and the Bengaluru International Airport (27 kms away). Since

limited retail space is present in northern Bengaluru, Sahakar

Nagar also caters to a large cosmopolitan population from

Hebbal, Yelahanka, Thanisandara Road, Jakkur and Jalahalli. The

demographic profile of the catchment consists of not only

employees from IT-ITeS industries in North Bengaluru, but also

from large number of employees working at the internationalairport. The anticipated malls in Thanisandra Road and Yelahanka

will further boost the retail activity in north Bengaluru.

Under construction

Metro Rail network

Road Network Emerging Retail Main

Streets Catchment

Emerging Retail

Submarkets

Established Retail

Submarkets

Operational Mall

BENGALURU

OldM

adras

Road

KamanahalliMainRoad

Old Airport Road

SarjapurRoad

HosurR

oad

KanakpuraR

oad

Mysor

eRoad

Magadi Road

TumkurRoad

Be

llary

Roa

d

MG Road

NEO Mall

Virginia Mall

Forum

Shantiniketan Mall

Brigade Mall

Elements Mall

RMZ Galleria Mall

Vaishnavi Mall

Galaxy Mall

Unitech GardenGalleria Mall

Forum Value Mall

Park Square Mall

Cosmos Mall

TotalMall

Gopalan Mall

Cosmos Mall

Phoenix

Market CityBrigade Orion

Mantri Square The Collection

Mall

The Collection

Mall

Gopalan Mall

Royal Meenakshi Mall

The Forum Mall

Lido Mall

EVA Mall

IMG Road Mall

Marathalli Junction

Central Mall

Total Mall

Kamanahalli Main Road

New Bel Road

Commercial Street

Indiranagar

100ft Road

Koramangala80 ft Road

Jayanagar

4th Block, 11th Main

Sampige Road,

Malleswaram

Vittal Mallya

Road

HSR Layout

Sahakarnagar

Under Construction Mall

NEW RETAILFRONTIERS

Completed

Metro Rail network


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Under construction

Metro Rail network

Road Network

CHENNAI

Emerging Retail Main

Streets Catchment

Chennai Suburban

Rail Network

Operational Mall Emerging Retail

Submarkets

Established Retail

Submarkets

PS Grand Mall

PhoenixMarket City

Coromandel Plaza

Chandra MallPrestige Forum

Mall

Ampa Skywalk

New BergamoMall

Spencers Plaza

Express Avenue Mall

Ramee Mall

City Center

ECR

Ambattur(MTHRD)

GrandS

outhern

TrunkRo

ad

NewAvadiRoad

Rajiv

Gandh

iSalai

ECR

Purusvakam High Road

Adyar Main Road

Usman RoadSouth

CathedralRoad

PondyBazar

Usman Road NorthKhadar Nawaz Khan Road

Nungambakkam High Road

Velachery

ndAnna Nagar 2 Avenue

Ambattur (MTH Road)

MTH Road, passing through Ambattur before merging with the

Chennai Bypass, has witnessed the establishment of several retail

outlets in the last 2-3 years due to its proximity to densely

populated residential neighbourhoods of Mogappair,Anna Nagar

West, Nolumbur and Padi and its proximity to the Ambattur

Industrial Estate. With many IT parks and commercial buildings

coming up, the industrial estate has transformed over the last few

years and is attracting mammoth real estate development in the

vicinity. Planned infrastructure upgrades such as widening of theMTH Road stretch in Ambattur can further provide an impetus

for retail stores seeking a first movers advantage in this emerging

main street.

ECR

The interplay of two major forces easy accessibility and

increasing urban sprawl gave momentum to retailers presence on

the East Coast Road in the stretch from Thiruvanmiyur to

Neelangarai, transforming it into an upcoming retail main street.

This main street is close to both Adyar and Rajiv Gandhi Salai and

is easily accessible by road. The presence of the Thiruvanmiyur bus

terminus and the Thiruvanmiyur MRTS Station attracts sizeable

shopping population from other suburbs such as Velachery. ECR

caters to the large residential catchment of Kottivakkam,Pallavakkam, Thiruvanmiyur and some neighbourhoods of Besant

Nagar and Rajiv Gandhi Salai (up to Shollinganallur).

Poonamall

eeHighRo

ad

2014

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Dwarka (Ashirwad Chowk)

The planned development of Dwarka as a satellite city in South-

west Delhi, located in close proximity to both Delhi and

Gurgaon, has been the driving force behind the emergence of

Ashirwad Chowk as a retail main street. Good quality

infrastructure in the form of wide roads, metro stations,

educational institutions and several branded hotel chains have

transformed Dwarka into a cosmopolitan hub. Since Ashirwad

Chowk is located at the intersection of 6 streets, connecting

Sectors 4, 5, 11 and 12, it also witnesses footfalls from nearby

Sectors such as Sectors 6, 9, 10 and 13 amongst others.

Sohna Road

With its massive IT clusters and increasing population, Gurgaon is

expanding horizontally. Sohna Road, a burgeoning residential

location for mainly the mid-income population is witnessing rapid

development of new residential projects, with nearly 10,000 units

currently under construction to meet the growing housing

demands. Supporting infrastructure such as schools and hospitals

between Netaji Subhash Chandra Chowk and the Golf Course

Extension Road crossing have made this a sought after residential

area. Due to lower rentals on this main street compared to

other prominent retail destinations in Gurgaon, this main street

has attracted many retailers belonging to apparels, fitness and F&B

segments. Reconstruction and widening of this stretch have also

stimulated the retail growth on this main street.

Under construction

Metro Rail network


Streets Catchment

Existing Metro

Rail network


Submarkets

Established Retail

Submarkets

DELHI-NCR

Ashirwad Chowk

Sohna Road

AthenaMall

Appu Ghar

Pratham

Lok

Mall

DLF

Galleria

Karol Bagh

Gurgaon

Delhi

IGI Airport

Janakpuri

Sector 14

Basant

Mehrauli-Gu

rgaonRoad

Gurgaon-FaridabadRoad

Go

lfCourseR

oad

NH

-8

Dlf Emporio

DLF Promenade

DLF Ambience

DT CityCentre

Gold Souk Mall

MGFMetropolitan

Sahara Mall

Star Mall

Omaxe Celebration Mall Raheja Mall

Omaxe City Centre

Gurgaon Omaxe Mall

Jmd Galleria

DLF Mega Mall

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NEW RETAILFRONTIERS


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Chanda Nagar

The development of dense residential clusters such as the BHEL

Township, Miyapur and Medinigud around Chanda Nagar is the

driving force behind the emergence of retail establishments on

this main street. Social infrastructure such as hospitals and

schools located in the vicinity of Chanda Nagar render support

to the local population and help in the creation of this retail hub.

Going forward, the planned Miyapur Metro depot will boost the

growth of Chanda Nagar main street. Further, two new malls in

the next two years in Chanda Nagar may boost this location as a

major retail hub.

Kothapet

Kothapet has emerged an organized retail stretch in the last 2-3

years due to its proximity to Dilsukh Nagar, which is one of the

oldest commercial hubs. Traditionally popular as a farmers market,

the arrival of companies such as Aditya Birla's More, coupled with

domestic apparels retailers, local department stores and

supermarkets has transformed this extension of Dilsukh Nagar

into a sought after retail location. Kothapet caters to the

residential populations of Saroor Nagar, Green Hills,

Chaitanyapuri and Gayatripuram Colony amongst others. Due to

the proposed metro connectivity, the Kothapet retail main street

will develop further drawing more footfalls.

Under construction

Metro Rail network


Streets Catchment

Emerging Retail

Submarkets

Established Retail

Submarkets

Operational Mall

HYDERABAD

Hitech City

Kothapet

GSM Infra Mall

Maruthi Mall

City Capital Mall

DSL Mall

NSL Centrum Mall

Manjeera Mall

Inorbit Mall

Forum Sujana Mall

GVK MallCity Capital Mall

Hyderabad Central

MPM Bonsai MallPrasads Mall

Chanda Nagar

MumbaiHighway

NewMumbaiRoad

ZooPa

rkMain

Road

DilsukhnagarMainRoad

Dilsukhnagar

M.G. Road

Kukatpally

Madhapur

Uppal

Banjara Hills

Jubilee Hills S.P. Road/ Begumpet

Abids

Raj Bhavan Road

Himayatnagar

A.S. Rao Nagar

Punjagutta Ameerpet

Hyderabad Road

Warangal-

2014

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Diamond Harbour Road

Located in the southern suburbs of Kolkata, Diamond Harbour

Road (Behala to Joka stretch) is fast emerging into a retail main

street in the wake of increasing residential penetration. Due to

the development of mini townships and high rises in the nearby

localities of Behala, New Alipore and Mahesthala, this retail main

street emerged to serve the needs of the increasing residential

activity. Development of residential complexes near industrial

areas such as Taratala also serve as a catchment for this main

street where apparels, jewellery, electronics and F&B segments

have witnessed good demand from consumers. The ongoing

construction of the metro corridor (Joka-BBD Bagh) is the major

infrastructural work that can impact this location.

NSC Bose Road

Situated in the middle of two of the busiest localities in Kolkata

Tollygunge (South) and Garia (South Peripheral), NSC Bose Road

is one of the busiest roads in the city. Organized retail

establishments have started mushrooming in the vicinity as it

connects two major transport hubs. While Tollygunge serves as

the terminal for several transport services such as trams, buses,

and metro, Garia has a couple of bus terminuses serving major

routes in the city. Enhanced mobility by these transport nodes is

the major driving force, which has propelled retailers to explore

NSC Bose Road as a retail avenue. Old residential colonies along

NSC Bose Road, along with high density residential pockets of

Tollygunge and Garia are the residential catchments for this main

street. The infusion of large quantity of good quality retail space,

which is currently under construction will further provide a fillip

to this location.

Under construction

Metro Rail network


Streets Catchment

Kolkata Suburban

Rail Network


Submarkets

Established Retail

Submarkets

KOLKATA

Belghoria Expressway

Park Circus Connector

Rashbehari Connector

Prince Anwar Shah

Connector

City Centre 2

City Centre

Acropolis

Quest Mall

South City Mall

Forum Mall

Diamond HarbourRoad

Gariahat

Park Street

VIP Road

Airport

Genexx Valley Mall

Mani Square Mall

NSCBose Road

Camac Street

Theatre Road

Elgin Road

S.P. Mukherhee

Road

Kankurgachi

Axis Mall

Metropolis Mall

Lake Mall

Diamond Plaza

Avani Riverside Mall

Forum Rangoli Mall

EM

Bypass

GT

Road

VidyasagarSetu

KonaExpressway

DH

Road

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NEW RETAILFRONTIERS


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Under construction

Mono Rail


Streets Catchment

Mumbai Suburban

Rail Network


Submarkets

Established Retail

Submarkets

MUMBAI

Colaba

Fort

Kemps Corner

Lower Parel

Bandra

Chembur

Vashi

Ghatkopar

Andheri

Malad Goregaon

Borivali

Thane

Mulund

Airoli

Vasai

Phoenix Mills

R City Mall

Nirmal

Lifestyle

Inorbit Vashi

Raghuleela Mall

CentreOne

Magnet

Mall

Oberoi Mall

Inorbit

Malad

Infiniti Ii

R Mall

Viviana Mall

Korum Mall

Dattani Square Mall

KurlaPhoenix

Market City

Infiniti

Seawoods Grand Central

Mum

baiAhm

edabadHighw

ay

WesternExpressHighway

EasternExpress Highway

Easte

rnFr

eeway

SionPanvelHighway

Chhatrapati ShivajiInternational Airport

Navi Mumbai InternationalAirport (Proposed)

Bhandup

JVLR

Completed Mono Rail

2014

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Ambadi Road

Due to its proximity to the Western suburbs and lower

residential prices compared to other Mumbai suburbs, Vasai has

emerged as a favourable residential market for the mid-income

earning population. To serve the needs of the large population

residing in Vasai, Ambadi Road has emerged as a preferred retail

destination. It is close to the suburban railway station, which

provides easy access to this main street. Due to the proximity of

the railway station and high density residential catchment,

Ambadi Road holds a lot of potential.

Airoli (Sectors 4 & 8)

The growth of Airoli as an IT-ITeS hub has had a cascading effect

on main street retail of Sectors 4 and 8 in recent years. The

sprawling IT parks and IT SEZs, such as Mindspace on the Thane-

Belapur Road (near Airoli Railway Station) have led to a large

floating population visiting the location; in turn, this has given a

boost to main street retail. The office space in Airoli and Thane-

Belapur Road is expected to increase by 50% of the current stock

in the next two years, which will give a fillip to main street retail

in Sectors 4 and 8 where enquiries from F&B, electronics and

apparels segments is high. Sectors 6, 9, 14 and 16 in Airoli are the

residential areas near this main street, which consist primarily of a

young working population.

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NEW RETAILFRONTIERS


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Pimple Saudagar

The metamorphosis of Pimple Saudagar as a self- sustaining

suburb of Pune with increasing retail activity is attributed to the

increasing population of young IT-ITeS professionals employed in

the IT hub of Hinjewadi. The absence of other established main

streets near Pimple Saudagar has proved to be a boon for

retailers looking to set shop here as the nearest main street is at

least 6 kms away from this location.An upcoming shopping mall

in the location will add to this retail markets growth in the near

future.

Kharadi

Kharadi has emerged as a new commercial office hub and retail

main street due to its proximity to upmarket residential

addresses in Pune. Located adjacent to established micro markets

such as Kalyani Nagar and Viman Nagar, where residential real

estate is quite expensive, Kharadi is considered to be suitable for

the mid-income population. Further, the IT-ITeS focused Special

Economic Zones have led to its transformation as a fast growing

locality. The presence of as many as four shopping malls within a

distance of 2-3 kms have already set the tone for organised retail

in this location.


Streets CatchmentOperational Mall

Emerging Retail

Submarkets

Established Retail

Submarkets

PUNE

2014

12

East Court

Inorbit Mall

Phoenix MarketCity

Mariplex

Koregaon Park Plaza

Amanora TownCentre

Seasons Mall

Nucleus Mall

SGS Mall

Kumar Pacific

Spot 18 Mall

Westend Mall

Blueridge Mall

Xion Mall

Aundh

F.C. Road

J.M. Road

M.G. Road

Bund Garden Road

Koregaon Park

Ishanya

Pimple Saudagar

Kharadi

Prime Mall

Old Mumbai PuneHighway - PCMC

KakadeCenterPort

AlandiR

oad

OldMumbai-p

uneH

ighway

Pune-nashikHighway

MumbaiP

uneByp

assRoad(n

h4)

UniversityR

oad

Mulshi

Road

KarveR

oad

PoudRoad

Satara

Road

Pune-solapurHighway

NagarR

oad



15/24

City Emerging Main Street Urban Sprawl Accessibility Proximity to Business Availability of Quality

District Retail Spaces

Bengaluru HSR Layout (27th Main)

Sahakar Nagar

Chennai Ambattur (MTH Road)

ECR

Delhi-NCR Dwarka (Ashirwad Chowk)

Sohna Road

Hyderabad Chanda Nagar

Kothapet

Kolkata Diamond Harbour Road

NSC Bose Road

Mumbai Ambadi Road

Airoli (Sectors 4 & 8)

Pune Pimple Saudagar

Kharadi

Demand Drivers for the Emergence of New Main Streets

Strongest Driving Force Stronger Driving Force Strong Driving Force Weak Driving Force

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NEW RETAILFRONTIERS


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ANALYSING RETAIL DYNAMICS

IN EMERGING MAIN STREETS

PRESENCE OF DOMESTIC AND FOREIGN BRANDS

Emerging main streets across the seven major Indian cities have

witnessed a dominance of domestic brands as compared to

foreign brands.Ashirwad Chowk in Delhi NCR, NSC Bose Roadin Kolkata and HSR Layout and Sahakar Nagar in Bengaluru have

recorded the highest share of foreign brands, each recording

more than 20% of total space absorbed by foreign brands. The

presence of foreign brands is significantly lower in all other

emerging main streets attributed to factors such as demography,

disposable income, easy accessibility and quality of retail space

available that are considered unfavourable by foreign retailers but

are not a deterrent to domestic ones.

20% 23% 17%

7%

23%

8% 10%

1%

16%

29%

11% 11% 7%11%

80% 77%83%

93%

77%

92% 90%

99%

84%

71%

89% 89% 93% 89%

HSRLayou

t(27thMain)

S

ahakarNagar

ECR

Ambattur

(MTHR

oad)

AshirwadCh

owk,

Dwarka

SohnaRoad

C

handaNagar

Kothapet

DiamondH

arbourRoad

NS

C

BoseRoad

AmbadiRoad

Airoli(S

ectors4&8)

Kharadi

Pim

pleSaudagar

Bengaluru Chennai Delhi-NCR Hyderabad Kolkata Mumbai Pune

Foreign Brands (%) Domestic Brands (%)

Presence of Foreign and Domestic Brands

2014

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Major Brands Present across 14 Emerging Main Streets

15

MUMBAI

PUNE

BENGALURU

DELHI-NCR

KOLKATA

HYDERABAD

CHENNAI

NEW RETAILFRONTIERS


18/24

0%

10%

20%

30%

Apparels &

Footwear

Automobiles F&B Electronics Clinic /

Pharmacy

Home

Improvement

Departmental

Store

Supermarket Mom & Pop

Store

Others Salon & Spa

Ambattur (MTH Road) ECR

0%

10%

20%

30%

40%

Apparels &

Footwear


Pharmacy

Home

Improvement

Departmental

Store


Store

Others Salon & Spa

HSR Layout (27th Main) Sahakar Nagar

SEGMENT MIX ACROSS EMERGING MAIN STREETS

Emerging main streets across the top seven cities have witnessed

mixed trends. Whilst some streets have emerged as a F&B hub,

others have emerged as apparels and footwear hubs, but almost

all segments are present across all main streets. Apparels and

footwear were noted as the most demanded retail segment and

constituted 24% of the total retail space taken up across cities,

followed by F&B accounting for 16% of the total space taken up.

The above two segments satisfy the basic needs of the residents

and so, in each of these main streets the space take-up of these

segments is the highest.The lowest percentage of space was taken

up retailers in the segments of Clinic / Pharmacy (3%), Salon & Spa

(4%) and Automobile and Mom & Pop stores stood at 6% each.

Except automobiles, most of these segments have small space

requirements and so the entire space take-up is small. Further

scope of each of these segment in each of the 14 emerging main

streets can be gauged through the graphs below:

Percentage Spread of Various Retail Categories (Bengaluru)

Percentage Spread of Various Retail Categories (Chennai)

2014

16


19/24

Chanda Nagar Kothapet

0%

10%

20%

30%

40%

Apparels &

Footwear


Pharmacy

Home

Improvement

Departmental

Store


Store

Others

0%

10%

20%

30%

40%

50%

Apparels &

Footwear

Automobiles F&B Electronics Clinic / Pharmacy Home

Improvement

Departmental

Store

Supermarket Others

Diamond Harbour Road NSC Bose Road

0%

10%

20%

30%

40%

Apparels &

Footwear


Pharmacy

Home

Improvement

Departmental

Store


Store

Others Salon & Spa

Dwarka (Ashirwad Chowk) Sohna Road

Percentage Spread of Various Retail Categories (Delhi-NCR)

Percentage Spread of Various Retail Categories (Hyderabad)

Percentage Spread of Various Retail Categories (Kolkata)

17

NEW RETAILFRONTIERS


20/24

0%

10%

20%

30%

40%

50%

Apparels &

Footwear

Automobiles F&B Electronics Clinic / Pharmacy Home

Improvement

Mom & Pop Store Others Salon & Spa

Airoli (Sectors 4 & 8) Ambali Road

0%

10%

20%

30%

Apparels &

Footwear


Pharmacy

Home

Improvement

Departmental

Store


Store

Others Salon & Spa

Kharadi Pimple Saudagar

Percentage Spread of Various Retail Categories (Mumbai)

Percentage Spread of Various Retail Categories (Pune)

2014

18


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RENTAL MOVEMENT IN NEW EMERGING MAIN STREETS IN LAST 2 YEARS

Emerging main streets typically quote at least 20-30% lower

rentals than established main streets across the cities.All

emerging main streets have witnessed an upswing in rentals in

the past two years as demand for spaces in these locations has

been increasing steadily. Dwarka (Ashirwad Chowk) is the only

emerging retail location to command a notably high rental.

Kothapet in Hyderabad recorded the lowest rentals as well asthe lowest rental upside of 4% in the last two years, mostly due

to high availability of spaces.

Limited availability of good quality retail spaces has led to a steep

rise in rentals over the last 2 years as many mid segment brands

are increasingly expanding to these locations. HSR Layout 27th

Main and Sahakar Nagar in Bengaluru have each witnessed a

robust 70% rental growth since 2012; however, the rental growth

has been from a smaller base and hence, these markets are still

attractive. Further, landlords in new main streets are usually more

flexible in terms of deposit and lease terms, which translates into

better cost-effectiveness for retailers even if rentals increase in

future on account of high demand.

0

10

20

30

40

50

60

70

80

0

100

200

300

400

500

600

HSRLayout(27thMain)

SahakarNagar

Ambattur(MTHR

oad)

ECR

Dwarka(AshirwadChowk)

SohnaRoad

ChandaNagar

Kothapet

DiamondHarbourRoad

NSC

BoseRoad

Airoli(Sectors4&8)

AmbadiRoad

Kharadi

PimpleSaudagar

Bengaluru Chennai Delhi-NCR Hyderabad Kolkata Mumbai Pune

Rental

Growth(%)

Rents(IN

R/sf)

Rent (INR/sf) % Rental Growth (in 2 years)

Main Street Rentals and their Growth in last 2 years

19

NEW RETAILFRONTIERS


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OUTLOOK FOR THESE

EMERGING MAIN STREETS

Until two years ago, the allowance of FDI in single-brand retail

and multi-brand retail were two major policies that boosted

growth of the retail sector and also demand for quality real

estate spaces. However, the relatively slower economic growth of

the country over the last two years (2012-2014) resulted in

sluggish demand in the retail sector and also led to deferment of

malls and other retail spaces. The retail sector as such has not

witnessed any policy announcements to boost its growth. Whilst

there is huge potential for organized retail in India, retailers are

awaiting conducive conditions to expand their operations.

Macroeconomic conditions need to improve further to

encourage consumer spending and the Government needs to

address the uncertainty that exists with respect to its policy

stand on FDI in multi-brand retail.The overall infrastructure to

support retail trade such as transportation and logistics too

needs to improve substantially for the sector to graduate to its

next phase of growth.

Emerging main streets have the potential to help retailers meet

some of their growth targets.As consumers are forced to move

to new suburbs and peripheral locations, they will find it

increasingly difficult to commute to the established retail hubs.

Given the time constraints in the busy modern life, convenience

and ease of shopping is fast becoming the single most important

factor for a consumer.This is also a major contributor to the

fast-paced growth of the e-retail market in India, which will not

however,impact the growth potential of brick and mortar retail

businesses.

Meanwhile, organised retailers have been focussing on quality

spaces only, which has witnessed inconsistent supply since thepast two years, thus limiting their growth strategies.The

emergence of new main streets not only can help retailers tap a

large consumer base that now resides in new suburbs and

peripheral areas but also create a semi-urban consumer base.

The semi-urban consumers are increasingly becoming more

demanding in their shopping choices and showing a higher

propensity to spend than urban consumers.

Our report has already highlighted some of the most prominent

emerging main streets in India.These have already gained

substantial traction and retailers are increasingly exploring

options in them. However, these still have high growth potential

and we believe that this is the right time for other retailers to

actively consider these and other emerging locations for their

own future growth.

Cities New Emerging Main Streets Potential (Growth Factors)

Bengaluru HSR Layout (27th Main) Proximity to IT-ITeS hubs on both sides; prolific residential development and future

metro connectivity

Sahakar Nagar Lack of retail avenues in the vicinity and densely populated neighbourhoods

Chennai Ambattur (MTH Road) Proximity to high population density residential catchments and burgeoning IT-ITeS hub

ECR Strategically located between two major commercial and residential hubs

Delhi-NCR Dwarka (Ashirwad Chowk) Infrastructure, broad roads and favourable population growth

Sohna Road Swelling residential catchment

Hyderabad Chanda Nagar Good connectivity and social infrastructure; increasing residential clusters

Kothapet Adjacent to old commercial hub

Kolkata Diamond Harbour Road Development of townships; increased residential penetration

NSC Bose Road Situated between two busy transport hubs; easy accessibility and ample good

quality retail space under construction

Mumbai Ambadi Road Vasai an established mid-income residential location

Airoli (Sectors 4 & 8) Growing concentration of IT-ITeS Parks in Airoli

Pune Pimple Saudagar Increasing population and lack of other malls or main streets

Kharadi High residential catchment area

Potential of New Emerging Main Streets

2014

20


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For more information on C&W's Retail

Services, contact:

Sanjay Dutt

Executive Managing Director, South Asia

Cushman & Wakefield

+91 22 6657 5555

[email protected]

For more information about C&W

Research, contact:

Siddhart Goel

Director, Research

+91 22 6657 5555

[email protected]

Cushman & Wakefield is the world's largest privately-held commercial real estate services firm. The company advises and represents clients on all aspects of

property occupancy and investment, and has established a preeminent position in the world's major markets, as evidenced by its frequent involvement in

many of the most significant property leases, sales and management assignments. Founded in 1917, it has approximately 250 offices in 60 countries,

employing more than 16,000 professionals. It offers a complete range of services for all property types, including leasing, sales and acquisitions, equity, debt

and structured finance, corporate finance and investment banking, corporate services, property management, facilities management, project management,

consulting and appraisal. The firm has nearly $4 billion in assets under management globally.

Cushman & Wakefield established operations in India in 1997 and was the first international real estate service provider to be granted permission by the

Government of India to operate as a wholly owned subsidiary. We are a strong team of over 2,000 employees, operating across New Delhi, Gurgaon,

Mumbai, Pune, Bengaluru, Chennai, Hyderabad, Kolkata and Ahmedabad. In addition, we service over 90 other cities such as Ahmedabad, Nagpur, Cochin,

Mysore, Mohali, Chandigarh, Goa, Ludhiana, Jaipur and Coimbatore amongst others.

A recognized leader in local and global real estate research, the firm publishes its market information and studies online at

www.cushmanwakefield.com/knowledge

Authors of the report:

Siddhart Goel

Director, Research

[email protected]

Divya Grover

Deputy Manager

[email protected]

Disclaimer

This report contains information available to the public and has been relied upon by Cushman & Wakefield on the basis that it is accurate and complete.

Cushman & Wakefield accepts no responsibility if this should prove not to be the case. No warranty or representation, express or implied, is made to the

accuracy or completeness of the information contained herein, and same is submitted subject to errors, omissions, change of price, rental or other

conditions, withdrawal without notice, and to any special listing conditions imposed by our principals.

2014 Cushman & Wakefield. All rights reserved.

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Manager

[email protected]

Anuradha Chakraborty

Associate

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contact:

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Director, Marketing & Communications

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