A report on the first half of 2017 by real estate consulting firm CBRE recently showed investments in India’s retail market by private equity firms and wealth funds touched $200 million.
During the first six months of the year there were 70 new entries or expansions by global and domestic brands across also seven new global brands entered India during the period, including apparel names like Kate Spade and Scotch & Soda.
The report also showed that India overtook China to top the Global Retail Development Index in 2017 with a market attractiveness of 63.4 per cent and retail sales of about $1 trillion.
Anshuman Magazine, CBRE’s India and South East Asia chairman mentioned that with several legislations and policies in implementation mode, there has 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.
Many retail developments were completed across select cities and resulted in about 1.5 million square feet of fresh supply entering the market. Demand for quality retail space was strong during the first six months of the year with a majority of the supply concentrated in Mumbai, Bengaluru and Delhi-NCR.
According to the report the supply pipeline for the rest of the year is also healthy and is led by Hyderabad and Bengaluru, adding that demand for quality space will remain strong in the fast fashion, department store, sport and leisure segments.
Rental growth in most high streets across key cities will be limited since rents in these locations have already peaked and the completion of infrastructure initiatives will decide the rental trajectory for markets.
Most essential items are exempt from tax, fast-moving consumer goods (FMCG) are in the 5 per cent tax bracket, restaurants are in the 18 per cent slab and some items–ranging from luxury cars to movie tickets priced over a certain amount–are in the higher 28 per cent bracket after there has been implementation of the goods and service tax (GST).
