Saturday, June 30, 2007

50 Indian cities ideal for retail sector

New Delhi, Delhi and Mumbai, Maharashtra, India, Friday, June 29, 2007 -- (Business Wire India)
Highlighting the growth opportunities and the emerging geography of Indian retail and property market activity, Jones Lang LaSalle Meghraj released its World Winning Cities report on Indian Retail. The report entitled �The Geography of Opportunity - The India 50� is the first report in a series on Indian Retail Futures. It highlights the significant opportunities for both domestic and international retailers and property investors across a broad range of geographies and formats.

�The Geography of Opportunity � The India 50� paper highlights that India�s retail sector is evolving at a swift pace, fuelled by a strong economy, favourable demographics, rising wealth levels and rapidly changing lifestyles and consumer aspirations of an ever burgeoning middle class. The real estate sector has responded well to this retail growth. The total retail mall stock has been doubling every year, from a meagre one million square feet in 2002 to a staggering 40 million square feet by end of 2007 and an estimated 60 million square feet by end of 2008.

Jones Lang LaSalle Meghraj�s research identifies 50 cities across India that are ideally positioned to benefit from the booming retail sector. The report launches a new retail city classification based on socio-economic characteristics, retailer activity and shopping mall development. The research identifies five types of cities (Maturing, Transitional, High Growth, Emerging and Nascent), each of which is at a different stage in its retail market evolution and offers different types of opportunities for retailers and the property sector.

Organised retail activity is still overwhelmingly concentrated in Delhi and Mumbai (the Maturing Cities) and considerable opportunities still exist in these two vast and diverse metros. We expect these two metros to contribute 40% of national organised retailing by year 2008. Delhi and Mumbai lead the Indian mall culture with estimated total mall stock of 22 million and 15 million sq ft respectively by 2008-09. Nonetheless, the report concludes that increasing competition in the NCR and Mumbai markets, combined with growing opportunities in India�s regional markets, is encouraging both retailers and property developers to move into new and potentially more rewarding markets further a-field. Organised retailing in India�s other main cities, such as Bangalore, Kolkata, Hyderabad, Pune and Chennai (the Transitional Cities) is growing rapidly however such is the pace of change, that many smaller Tier III cities are now firmly on the radar of the retail sector and mall developers.

Vincent Lottefier, CEO, Jones Lang LaSalle Meghraj, says, �India�s 50 cities identified in our report clearly offer substantial and compelling opportunities for India�s growing retail sector. With a population of over 1 million each, these cities will form the very core of India�s emerging retail hierarchy. Interestingly, the top 15 cities (Maturing, Transitional and High growth) from the 50 retail destinations are expected to contribute more than 80% of the total national retail business by 2008. India�s retail awakening is characterised by rapidly changing customer behaviour, new market entrants and evolving government policy. It is imperative to comprehend India�s enormous cultural and regional diversity to get a realistic perspective on the opportunity at hand�.

The report highlights tertiary cities such as Chandigarh, Ludhiana, Jaipur, Lucknow and Kochi (the High Growth Cities) as leading the pack, attracting considerable retailer interest due to high incomes and strong brand awareness. The �next retail destinations� over a three year horizon are likely to be �Emerging Cities� such as Nagpur, Coimbatore and Thiruvananthapuram, where IT/ITES companies are expanding their workforces, which in turn is stimulating retailing activity. The more pioneering retailers and mall developers are now seeking to benefit from first mover advantage and are moving into �Nascent Cities� such as Aurangabad and Rajkot, which are likely to provide good long term opportunities.

�Emerging City Winners� is Phase IV of Jones Lang LaSalle Meghraj�s World Winning Cities research. It brings to the fore cities that are already buzzing with retail activity and those which are catching up rapidly to be the next retail hot spots. Many of these Indian rising urban stars offer significant retail opportunities and have not traditionally been on the radar screen on the property sector.

About Jones Lang LaSalle Meghraj

Jones Lang LaSalle Meghraj is the Indian operations of Jones Lang LaSalle's Asia Pacific business, which established over 45 years ago and currently has 60 offices across 13 countries. Globally, Jones Lang LaSalle Inc. (NYSE: JLL), the only real estate money management and services firm named to FORTUNE magazine's "100 Best Companies to Work For" and Forbes magazine's "400 Best Big Companies," has approximately 160 offices worldwide and operates in more than 450 cities in over 50 countries. With 2006 revenue of over USD2 billion, the company provides comprehensive integrated real estate and investment management expertise on a local, regional and global level to owner, occupier and investor clients. Jones Lang LaSalle is an industry leader in property and corporate facility management services, with a portfolio of over 1 billion square feet worldwide. In 2006, the firm completed Capital Market sales and acquisitions, debt financing, and equity placements on assets and portfolios valued at USD 70.9 billion. LaSalle Investment Management, the company's investment management business, is one of the world's largest and most diverse real estate money management firms, with approximately USD44.3 billion of assets under management.

In India, the Jones Lang LaSalle Meghraj geographic footprint covers ten cities of Delhi, Mumbai, Bangalore, Pune, Chennai, Hyderabad Kolkata, Kochi, Chandigarh & Coimbatore. With a staff strength of over 2800 employees and deep geographic coverage, this is the premiere and largest real estate services company in India. Jones Lang LaSalle Meghraj has been successfully providing quality advice on services such as research, consultancy, transactions, project and development services, integrated facility management, property management, capital markets, residential, hotels and retail advisory to investors, local corporates and multi-national companies since 1995. For further information, please visit

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  1. Hello sir the blog post written by you talking about the boom in the organized retail is an interesting one.You have mentioned that organized retailing is one of the major factor behind the rising of real estate prices in metros as well as small towns, i would like to state one point here that recently in places like gurgaon,mumbai lot many shops have been vacated just because of the rent shooting up..thats the twist in the story what's your take on this ? where is the market going to head towards??

  2. Hi Nikhil the questions asked by you are very much relevant considering the current situation.I feel now the situation is again going to change with entry of a lot many retail giants into the indian ecoomy.Considering the sudden spurt in real estate prices on back of retail boom in metro and mega cities of the country, it makes sense for large retailers to partner with real estate developers. While, the developers can handle property end, which forms an important part of the retail business matrix, of the business, large retailers can focus on their core competence of retailing.

    This is a win win situation for both since, while real estate developers are able to ensure perpetual inflows for their properties, retailers can focus on core business, without being much hindered by their local partners.
    Check out my realty blog

  3. Nancy the point made by you is upto the mark that the developers and the retail giants should join hands together for better deals for both of them.But sometimes small petty issues do disturb and cause problems.In past it has been seen and observed that having a real estate in between helps.Lot many people do prefer a good, well renowned real estate consultant to smoothen up the process and to delegate them the work in which they specialize.I liked your blog and would advice others to review it as well.

  4. Nancy the point made by you is very much valid but its always good to go through a well known realtor like Axiom Estates . Their involvement in running of the entire relationship between the retailer i.e the tenant or the buyer and the developer i.e the seller is really important.History says it all that small issues and problem do comes up sometimes or the other between both the parties that's why it is always advisable to consult a good well known realtor.I really liked your blog and would recommend it to others as well.