• Cities that saw maximum retail growth in 2018 included MMR, NCR, Bengaluru and Kolkata
  • PE investment inflow in the segment grew 54% in H1 2018
  • 32 new malls spanning nearly 13.5 million sq. ft. is slated to be operational in 2019

Anuj Kejriwal, MD & CEO – ANAROCK Retail

Besides commercial office spaces, the retail sector also emerged as one of the most vibrant and fast-paced real estate sectors in India in 2018.

Among the major policy overhauls, the Government further liberalized FDI policies early in the year. These policy interventions repositioned the Indian retail sector on the global map of investments, attracting a large number of global retailers into India and further fuelling the growth of organized retail in the country.

The Government’s decision to allow 51% FDI in multi-brand retail and 100% FDI in single-brand retail under the automatic route was a definite crowd-pleaser that attracted giants like Walmart to make forays into the country.

The Government is now mulling to further tweak norms for retail trade – similar to SEZs – and enacting a 365-days working policy to help India climb higher on the Ease of Doing Business index among 190 countries.

  • New housing supply estimated at 1,93,600 units by 2018 end; an annual increase of 32%
  • Housing sales in 2018 estimated at 2,45,500 units; an annual increase of 16%
  • NBFC crisis holds sector at gunpoint as 2019 begins

Anuj Puri, Chairman – ANAROCK Property Consultants

The year 2018 was a veritable roller-coaster ride for Indian real estate. Despite signs of recovery across segments, the liquidity crunch – further exacerbated by the NBFC crisis – put all industry stakeholders on tenterhooks.

Consolidation via mergers and acquisitions was rife in all sectors, completely redefining the concept of ‘financial health’ among players and drawing clear lines on who will survive the heat. This process will continue throughout 2019, as well.

Despite all odds, economic indicators remained positive with India’s GDP growth rate pegged at 7.3% in 2018. CPI inflation, a major concern in the past, remained reined in at a manageable 4.8%.

GDP growth and contained inflation are generally considered panacea for most real estate woes. However, it took a lot more than that for real estate to retain even a semblance of an even keel in 2018.

Anuj KejriwalAnuj Kejriwal, MD & CEO – ANAROCK Retail

  • Online retail is projected to grow to US$ 73 billion by 2022
  • Retail sector attracted US$ 147.40 million investments in FY18
  • Organised retail penetration expected to reach 10% in 2020 against current 7% 
  • Amazon & Alibaba are investing in offline stores – brick-and-mortar retail will survive the ‘online assault’

The Changing Dynamics of Indian Retail 

The Indian retail sector is on a faster roll than ever before. Rapid urbanization and digitization, rising disposable incomes and lifestyle changes – particularly of the middle-class – are acting as booster rockets for the Indian retail sector, which is projected to grow from US$ 672 billion in 2017 to US$ 1.3 trillion in 2020.

Over the last two decades, the Indian retail market has witnessed phenomenal changes, evolving rapidly from traditional shops to large multi-format stores in malls offering a global experience, and on to the highly tech-driven e-commerce model.

These changes have resulted in unprecedented growth in overall consumption with numbers suggesting that consumer expenditure in India will rise to US$ 3,600 billion by 2020 from US$ 1,824 billion in 2017.

  • 91% of Indian retail sales driven by brick-and-mortar stores, but smaller cities remain underserved

  • Good quality mall stock to increase by 10-15%; mediocre-to-weak stock to decline by 5-10%

While e-commerce and brick-and-mortar stores will continue to co-exist in India, e-commerce currently has a definite edge over physical retail in India’s tier II and tier III cities warns ANAROCK Retail’s report Rebirth of Retail Malls: New, Improved and Revitalized.

The report, which was released at the India Retail Forum (IRF) in Mumbai today, mentions that India’s tier-II / tier-III cities will also be key contributors to the country’s retail growth going forward. The organized retail market is growing at CAGR of 20-25%.

Anuj Kejriwal“Nearly 100 million people out of India’s 300-400 million-strong middle class currently live in tier-II and tier-III cities,” says Anuj Kejriwal, MD & CEO – ANAROCK Retail. “This indicates that a significant portion of Indian retailers’ target clientele lives in the non-metro cities. In cities such as Jaipur and Surat,

Anuj Kejriwal, MD & CEO – ANAROCK Retail

The e-commerce revolution and the upsurge in digital technologies are fundamentally transforming shoppers’ expectations.

This transformation also has a major bearing on the function of brick-and-mortar stores, which now need to render more useful and entertaining customer experiences.

As trends advance globally, mall operators are forced to rethink and re-strategize as to how they must design, enable and operate their physical stores.

The Advent of ‘Smart’ Stores

In today’s digital era, physical stores are getting ‘smarter’ by using technologies like robotic intelligence, analytical data and consumer-centric platforms such as Augmented Reality (AR) or Virtual Reality (VR) to attract customers and give them an impactful experience.

By uniting conventional methods with key success elements of the digital ethos, brick-and-mortar retailers, in fact, have an advantage over e-commerce, as they can offer mall visitors an experience that vastly surpasses that of online shopping.

Information technology can be effectively used to tap into tech-savvy consumers’ predilections with appropriate tech-enabled in-shop ‘responses’.

Numbers suggest that consumer expenditure in India will rise to US$ 3,600 billion by 2020 from US$ 1,595 billion in 2016.

ANAROCK Launches ANAROCK Retail To Tap Into India’s $700 Bn. Retail Market

  • Partners with Faithlane PC to create India’s most focused retail advisory firm

Mumbai, 6 June 2018: India’s leading independent real estate services firm ANAROCK Property Consultants today announced the official launch of ANAROCK Retail, a new firm dedicated to tapping into India’s $700 bn. retail market via its expert retail consultancy services.

The new firm is the result of a partnership between ANAROCK and Faithlane Property Consultants, headed by retail realty veteran Anuj Kejriwal who joins as CEO & MD – ANAROCK Retail.

ANAROCK’s entry into the retail real estate domain was really only a matter of time,” says Anuj Puri, Chairman – ANAROCK Property Consultants. Mr Puri is himself an acknowledged retail real estate expert who, in addition to his previous role as Chairman of a leading IPC in India, was also Chairman of its Global Retail Leasing Board.

“We have a deep market reach in this domain,

Anuj Puri, Chairman – ANAROCK Property Consultants

  • Over 30 new shopping malls covering 14 million sq. ft. of the area expected across top 8 cities by 2020
  • Indian retail pegged to grow by 60% to reach US$ 1.1 trillion by 2020
  • Tier 2 cities fast catching up with the metros

Rapid urbanization and digitization, increasing disposable incomes and lifestyle changes of the middle-class are leading to a major revolution in the Indian retail sector, which is pegged to grow by 60% to reach US$ 1.1 trillion by 2020.

The Government has clearly hit the bullseye by easing the FDI norms in the retail sector over the past few years. Reacting to the immense opportunities and diminishing entry barriers into the Indian retail scene, overseas retailers are now expanding exuberantly.

And it’s not just the metros they’re targeting – even tier 2 cities like Ahmedabad, Chandigarh, Lucknow and Jaipur, to name a few, are opening up for organized retail in a big way. Malls are literally mushrooming across the Indian subcontinent.

Ready,

Anuj Puri, Chairman – ANAROCK Property Consultants

With the advent of e-commerce in India, shopping converged into mobile devices in the form of websites and/or apps.

At the click of a button, one could buy groceries, apparel, electronics and almost everything else. For a while, it appeared that ‘couch potato shopping’ was a real threat to physical retail, and that shopping malls will run out of business.

That has not happened – in fact, shopping malls are witnessing a visible resurgence in India.

A clear measure of increasing focus on the retail sector is that private equity (PE) players invested more than $700 million into Indian retail in Q1-Q3 2017 itself – around 90% of the investments that came in during the past two years (2015 and 2016).

Shopping malls in India have come a long way indeed, from less than 5 malls in 2001-02 to more than 500 in 2017. Over the last few years, as the overall economy struggled, there was a drift of negativity about Indian shopping malls being able to sustain and were ‘going to be out of fashion’.