Retail real estate mkt slowly maturing

City accepts and experiments with contemporary retail formats

The Bangalore retail real estate market has been slowly maturing and new supply is likely to slow down in the current year. Till the end of 2004, there was about 1.3 million sq feet of retail real estate space, of which about 67 per cent had come up recently.

The total addition to the retail stock in 2004 was 0.75 million sq feet. However, 2004 also saw a slowdown in development activity and only about 0.45 million sq feet of new retail stock is scheduled to enter the market in 2005.

In Bangalore, about eight malls are in various stages of planning which will add about 2.3 million sq feet of retail space by 2007, says the KnightFrank Retail Review for second quarter 2005.

KnightFrank indicates that the new development will come up in a more organised and professional manner, with both retailers and developers working together to identify key catchment areas to establish a balanced mix of space supply.

Rentals in the central business district (CBD) continue to command a premium and the greater proportion of retail development in this area is limited to small format stores on the high street model.

However, the CBD may witness spurts in new supply with the latest entrant being the Eva Mall. This trend is likely to continue till the end of 2007 and abate soon after with the CBD becoming very congested, says the report.

A noticeable trend in the Bangalore retail scenario has been the proliferation of speciality retail outlets which include healthcare stores, pharmacies like Health & Glow and Pill & Powder, fast food chains like Pizza Hut and KFC and coffee chains like Cafe Coffee Day, Barista and Qwicky's.

Since 2003, Bangalore has seen a trend towards the establishment of hypermarts and urban malls which range between 0.1 to 0.5 million sq feet in area. Till date, five new malls have come up, bringing the retail mall/hypermarket space by end of 2004 to 1.33 million sq feet.

The traditional retail/ shopping districts of Bangalore "" Brigade Road, Commercial Street and the Residency Road-Richmond Road areas continue to witness high demand with the stand alone stores of brands such as Planet M, Proline, KFC occupying space at rentals of Rs 85-250 per sq feet per month.

The suburbs "" Indiranagar, Jayanagar, Koramangala and Malleswaram "" which have the largest share of organised retail, command lease rentals in the range from Rs 50-75 per sq feet per month.