In the past few years, Bangalore’s retail journey has been growing with several international and national brands setting up their retail stores in the City.
Robust economy, rising per capita income, development of IT sector, migration of middle class earning families, and large scale retail development have fuelled the growth of the Silicon Valley of India.
Previously, shopping malls across the city were essentially anchored around a department store or more often a hyper/super-market area chain however; this is project to change soon, according to a report “Bangalore: Retail Real Estate Market Report 2013 brought out by Vestian Global Workplace Services, a fully owned subsidiary of Vestian.
With the spatial expansion of Bangalore, the high-street locations are no longer confined to the Central Business District (CBD) area. High-street locations of Brigade Road and Commercial Street have been in existence since 1950s are located in close proximity to the CBD.
Now, Bangalore North witnessing increased retail activities. Bangalore North include Kamanahalli Main Raod, Sahakarnagar while Marenhalli Road (JP Nagar – Outer Ring Road stretch) towards south-west of the City is gaining prominence as a result of high-street mainly due to limited shopping mall space in the vicinity.
Despite commercial activity in Bangalore North being nascent stage, this region has witnessed increased residential supply. Shift in the developers’ interest towards this location has made way for many planned retail projects. Key developers including Brigade Group, MFAR Holdings, Century Group and Ozone Group have planned shopping malls in the north region.
One of the key finding of the report is that ORR-Sarjapur will be the most attractive micro market for retail development due to lack of existing and under construction mall space. Meanwhile, Bangalore North and Old Madras Road have potential for development of malls within next 3-5 years. Old Madras Road, of late has witnessed increased residential activity with major Class A developers launching their residential projects.
Currently, not many retail activities across this micro-market is anticipated to gain momentum in the medium to long-term. Salapuria Sattva Group is set to launch the World Market (1.0 million sqft) in this location. The report said the city is likely to witness a hike in mall rentals owing primarily to a healthy increase in the metropolitan population and anticipated relaxation in FDI in multi-brand retail.
Noting high demand for space in high street locations, it said these locations are preferred mainly by apparel and footwear tenants (54%), followed by food and beverages (16%), electronic goods (9%), personal care, watches and jewellery (7%) and books, stationery and gifts (4) and automobiles (3%).
During 2009-12, rental values across high-street locations of the city grew annually in the range of 5-9 per cent mainly due to limited upcoming supply and lower vacancy rates. Average annual rental appreciation in high street location in Brigade Road is 9 per cent, Commercial Street – 9 per cent, Lavelle Road and Vittal Mallya Road – 6 per cent and Indirangar 100 feet Road – 5 per cent, the report said.
The City’s high- street locations continue to attract national and global retail brands regardless of increased mall space in the city due to higher brand visibility and considerable footfalls. However, traffic congestion, lack of unobstructed pedestrian walkways and limited parking space facilities are some of the basic concerns that require improvement, the report said.