India is now the hottest destination in the retail space

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Retail in India overtakes China in H1; global brands, hypermarkets expand presence: CBRE

India has topped the Global Retail Development Index in 2017, overtaking China. During the first six months of the year, there were 70 new brands which marked their presence in Mumbai, Delhi-NCR and Bengaluru.

According to CBRE’s India Retail MarketView Report – H1, 2017, seven new global brands entered the country and investments into the segment by firms/wealth funds touched $200 million.

Additionally, several retail developments were completed across select cities, resulting in around 1.5 million sq.ft. of fresh supply entering the market. During the first half of the year, demand for quality retail space remained robust with a majority of this supply concentrated in Mumbai, Bengaluru and Delhi- NCR.

Anshuman Magazine, Chairman, India and South-East Asia, CBRE, said: “Our ranking on the 2017 Global Retail Index for developing countries as well as continued investment by private equity players is a demonstration of the sustained preference of international brands to set up, or expand their operations in India.

“With several laws and policies in implementation mode, we are already seeing an increase in consumer and investor confidence. This will have a cascading effect on the retail segment. Overall, retail real estate will continue to grow and witness healthy demand across tier-I and -II cities.”

Vivek Kaul, Head, Retail Services, said, “The fact that demand for quality space continues to outstrip supply is indicative that the retail real estate segment across key cities in India is growing exponentially. While global brands continue to evaluate and consider quality retail developments in the top cities, with growing globalisation, smaller cities are also gaining prominence and witnessing traction.

“While there still remains some ambiguity around the highway liquor ban, resulting in F&B operators being in wait-and-watch mode, the overall market sentiment continues to be positive.”

During the first half of the year, a number of international brands already present in the country expanded their presence. Several hypermarkets too were in expansionary mode, including Big Bazaar, which opened new stores in Mumbai, Bengaluru and Chennai.

Clothing retailers such as Max and Pantaloons were also active during the review period.

According to the report, rental trends continued to vary across key high streets in major cities during the review period. While high streets such as Connaught Place, Khan Market, and South Extension in Delhi and Park Street and Elgin Road in Kolkata witnessed a rental appreciation, rentals in most other high streets remained stable.

At the same time, some high streets such as Linking Road in Mumbai and MG Road in Pune saw a marginal dip in rentals.

Source: The Hindu Businessline

India ranks second on GRD index on ease of doing business : study

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India has jumped 13 positions from last year to rank second among 30 developing countries this year on ease of doing business, according to a study topped by China.

According to 2016 Global Retail Development Index (GRDI), which ranks top 30 developing countries for retail investment worldwide, a pick-up in GDP growth and better clarity regarding FDI regulations have helped India achieve a second ranking.

Debashish Mukherjee, a partner with A T Kearney and co-head of the Consumer Industries & Retail Products Practice for India and Southeast Asia, said,

India’s strong ranking reflects foreigner retailers increased optimism in its retail market and its vast growth potential. India has relaxed several key Foreign Direct Investment (FDI) regulations in single-brand retail and this has paved the way for multinational firms to enter the market, Mukherjee said.

India’s retail sector has expanded at a compound annual growth rate of 8.8 percent between 2013 and 2015, with annual sales crossing the $1 trillion mark, according to A T Kearney, a London-based business consultancy.
India has also become the world’s fastest growing economy. That, coupled with a large population base and the easing of FDI regulations in the sector, has made it an even more attractive market, it said in the ranking.

We expect to see e-commerce to propel India’s growth and make it a more attractive proposition. However, there are some challenges as well. India remains a challenging and complex market for foreign retailers, where understanding dynamics at the state level is important. Infrastructure bottlenecks including labour laws, complex regulations, high labour attrition rates, and limited high-quality retail space remain areas of concerns for retailers, Mukherjee said.

The country’s retail sector has also benefited from the rapid growth in e-commerce. India is the world’s second largest Internet market and the increasing Internet and smartphone penetration is contributing to the expansion of e-commerce.

As Indian consumers become more comfortable with shopping online, venture capital and private equity firms have boosted investment in the sector, providing further momentum, the report said.

Source: http://yourstory.com/2016/06/india-ranks-2nd-on-ease-of-doing-business/