The Bangalore retail real estate market showed a mixed bag of growth in 2012. The requirement remained by and large strong in certain areas of Bangalore. Areas like Brigade Road, Commercial Street, New BEL Road, Sampige Road, Basveshwar Nagar, Banashankari, Marathahalli and Kamanahalli registered high growth. Localities like Bellary Road, Sahakar Nagar, Yelahanka and Rajajinagar were also sought after by organized players.
“The growth in organized retail sector in Bangalore has shown a steady upward trend in the last couple of years,” said Avinash Rao, Regional Director- South, Knight Frank Pvt. Ltd. “Hence, while some micro-markets in East Bangalore witnessed an over-supply situation, others in North and West Bangalore have a dearth of organized retail space.”
In terms of retail space absorption, Bangalore’s top performer in 2012 has been Indiranagar, whose high leasing activity was a direct result of its proximity to established residential catchments. Indiranagar continues to solidify its position as a high-demand destination for high street retail spaces, especially by international brands.
“Demand is there in the market, the only challenge is quality supply in terms of location, construction and other amenities,” observed E Nanaiya, Proprietor of ShriKrishna Real Estate Agency. “Any good property which makes financial sense to the retailer is leased easily.”
However the year witnessed the shrinking of the average size of the stores to reduce on rentals. Retailers have also targeted emerging high-streets rather than focusing on the established localities. Hypermarkets focused on residential real estate locations and stores which had signed-on at high rentals, renegotiated them or closed down of rentals or have closed down in the last 3 years.
Industry analysts are however positive about 2013. Areas expected to witness growth include, North and East Bangalore and the Kanakpura Road belt.
“We can be safely positive about 2013,” said Nanaiya. “Rapidly developing infrastructure and expanding residential catchments in these locations are clearly harbingers of increased retail activity in the mid-to-long term, not just for Malls but for mid and large retail space developers. With FDI in retail in the offing we are likely to see further growth.’’