“Legislative issues, Lack of Quality Retail space are impediments”, to spread of Organised Retail in India | CBRE

“High Rentals  and “poor Mall-Management” are deterrents to Entry & Expansion of #InternationalRetailers in the country”, says a study by the real estate services firm..!!

Almost 60% of global retailers have a presence in India, but legislative issues and lack of quality space continue to impede the growth of organised retail in the country, CBRE Research has said in a study titled ‘Expanding Horizons of Global Retailers in India’.

The multinational #RealEstateServices firm analysed more than 300 prominent global retailers in the study to identify Operating-trends, #ExpansionStrategies and extent of #MarketPenetration across Leading cities in the country..

The firm undertook this project in an effort to map and analyse the spread of international retailers in India, where the expansion of global retailers has been a major driver of real estate demand..The study analysed Brands across Luxury, Premium & High-end Categories, and judged their presence in the country on the basis of #StandaloneStores within Malls as well as Traditional Marketplaces / #HighStreets…

Although India has emerged as a prominent destination for #RetailSegments, such as Food and Beverages (F&B), #FashionApparel and BigBox / #HypermarketChains, almost FOUR out of TEN #GlobalRetailers, are yet to set up shop in the country…the study found..

Nearly 80% of the retailers that have entered India are present in New Delhi while the figure is 70% for Mumbai and nearly 50% for Bangalore. This signifies the significance of the metropolitan cities as the preferred entry points for international retail chains..

The retailers chose tier II cities such as Pune, Hyderabad, Kolkata, Ahmedabad, Chandigarh and Jaipur next, the study shows….” India is still a largely untapped and #unorganisedRetail Market as a large number of prominent #GlobalRetailers are yet to commence operations here…The country holds a considerable advantage over other #EmergingRetailDestinations due to its strong Domestic-consumption and Low-rate of #MarketPenetration by #InternationalRetailers…

India’s new middle class is increasingly becoming brand conscious and willing to spend on quality goods, a trend which is creating numerous business opportunities for mid-range international brands. With political and economic sentiments already showing signs of improvement, we believe this is the right time for international retailers to look at India for expansion into the region,” said chairman and managing director of CBRE, South Asia..

American brands account for the bulk of retailers covered in the CBRE study, comprising 30% of the total…Most US retailers are present in the mass market F&B category while retailers from Italy and the UK account for about 19% and 16%, respectively, and are largely concentrated in the luxury segment..

The study also points to the lack of Quality #RetailRealEstate supply, coupled with prohibitive-legislation that has acted as an impediment to the spread of organised retail in India..

Compounding the problem of limited investment-grade supply of #RetailSpace are high-rentals and lack of professional #Mall-management, all of which make for a challenging operating environment for Global Retailers, the study says…!!

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