Small Indian cities to witness high retail developments by 2029: Report

Smaller cities, particularly Tier-II and Tier-III locations, are expected to see 25 million square feet (msf) of new retail supply by 2029, according to a report by JLL India. This expansion is driven by increasing consumer demand, availability of land, and a historical lack of quality retail developments in these markets. Chief Economist and Head of Research and REIS at JLL, Mr. Samantak Das, noted that North Indian Tier-II and Tier-III cities like Ludhiana, Jaipur, and Lucknow will account for 44% of the total upcoming retail supply. In comparison, southern India is projected to contribute 30%, with Coimbatore, Malappuram, Thrissur, and Trivandrum leading this growth. The eastern region is set to see a supply of 4.5 msf, primarily driven by Guwahati.

In western India, major developers are initiating large-scale, high-quality retail projects in cities such as Goa, Surat, and Ahmedabad, according to him. Developers strategically acquire land parcels in these emerging cities to establish retail projects. Head of Retail Services and Office Leasing Advisory at JLL India, Mr. Rahul Arora, stated that leading real estate developers have increasingly invested in land for retail development in Tier-II and Tier-III cities. Notably, 30% of institutionally held retail assets are located across 12 of these cities, reflecting the appeal of lower land costs and the rising aspirations of consumers in smaller urban areas. Key cities include Amritsar, Chandigarh, Ludhiana, Udaipur, and Mohali in the north; Mysuru and Mangalore in the south; Ahmedabad, Surat, Indore, and Nagpur in the west; and Bhubaneswar in the east.

Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.