The real estate sector's performance - a reliable barometer of India's overall economic health - painfully reflected the macro-economic state of affairs in 2019.
Category: Retail
ANAROCK data reveals that in the top 7 cities, retail leasing activity dropped by 35% in 2019 as against the previous year.
Just as FinTech focuses on the use of technology in finance, PropTech uses digital innovation to address the needs of the property industry.
Sanjay Chugh, City Head – Chennai, ANAROCK Property Consultants
Today, a city’s real estate success formula depends on quite a few other industries than just housing. Housing demand is a natural by-product of the success of businesses and industries that drive consumption and create jobs.
Chennai’s strengths as an automobile hub have already earned it the tag of ‘the Detroit of the East’, but it has also emerged as one of the leading IT/ITeS destinations of the country.
Both these industries drive job growth, which in turn drives housing demand, but there are at least two other industries that share a deep symbiotic relationship with Chennai’s overall real estate viability – the organized retail and warehousing & logistics sectors.
Shopping Malls
An economic downturn or no economic downturn, Indians love to shop.
Some consumer items like cosmetics (the fabled ‘lipstick effect’), fast fashion and electronics like Smartphones are actually beating the current trends, with the growth figures in these industries still firmly in the green.
Malls are the best places to shop for these – and to enjoy a few hours in clean,
Anuj Kejriwal, MD & CEO – ANAROCK Retail
The tragic debacle around CCD’s debt-ridden founder may be indicative of a larger malaise
- Rentals can eat away almost 15-20% of the overall revenue an Indian coffee shop generates
- Corresponding costs in countries like the US is just around 5-6%
- many indigenous coffee shops are unable to survive more than 18 months into the business
From the early morning dose to business deals closed over a cup of java, coffee keeps us charged; the millennial coworking culture is often incubated and based in cafés. As a consequence, there has been a stupendous rise in the number of coffee chains and concept bistros across the country.
It all started with Café Coffee Day – popularly known as CCD – which gave the country its first coffee shop way back in 1995, long before global giants arrived.
Today, places like Café Coffee Day are no longer just hangouts or meeting joints, and certainly not just about coffee. They offer a unique ambiance, music and free Wi-fi to youngsters and entrepreneurs alike.
As per ANAROCK data, despite increasing vacancy levels nearly 13.6 mn sq. ft. of new mall space is likely to come up in the entire MMR by 2022.
ANAROCK's latest retail report states that Indian mall developers are looking to add over 65 mn sq. ft. of new mall supply across the country by 2022-end.
The new concept of 'cloud kitchens' - which involve low operating costs and high-profit margins - is gaining increasing traction among F&B players.
Anuj Kejriwal, MD & CEO – ANAROCK Retail
The advent of ecommerce in India ‘smartly’ altered the shopping habits of Indian netizens. Anything and everything – from groceries to apparel to electronics etc. – is now just a click away.
For a while, it appeared that ‘couch potato shopping’ was gaining prominence and disrupting the entire brick-and-mortar business. It now emerges that this has not really happened.
Despite causing disruptions, the ‘ecommerce effect’ was not enough to have a significant and lasting impact on the conventional retail formats.
For a while, online giants like Amazon and Walmart-owned Flipkart were basking in the rising success of the effervescent Indian ecommerce business arena. They were manoeuvring strategies to penetrate deeper into newer markets by way of discounts for their customers.
And then, the Government pulled out a wild card – and thereby threw a major spanner in the works – with the new ecommerce policy.
It came as a shock for the affected entities, including consumers who were buried deep in the world of cash-backs and deep discounts. However, thanks to the new policy, traditional retailers now had a more level playing field and could regain a significant share of their brick-and-mortar stores.
- Three-fold jump of mall supply this year – from 3.2 mn. sq. ft. in 2018 to nearly 10 mn. sq. ft. – following supply rollover from the previous year
- Online players plan survival tactics post new E-commerce policy; eye brick-and-mortar spaces
- E-commerce pegged to grow at 27% CAGR, offline retail at 16% between 2017 & 2021
- Nearly US $1.42 bn FDI infused in Indian market between April 2000 to June 2018
Mumbai, 25 February 2019: Responding to burgeoning consumerism in India, mall developers are rapidly infusing new retail developments across the top 7 cities, with nearly 10 mn. sq. ft. new mall supply in 2019.
Factoring in the rollover of some supply from 2018, there will be a three-fold jump in 2019 against the preceding year.
These and other critical insights are outlined in the research report ‘Customer Experience (CX): The Epicentre of Retailing’ by ANAROCK Property Consultants, released at the Retail Leadership Summit (RLS) 2019 in Mumbai today.
Customer experience and built environment are completely metamorphosing the retail business in the country,