India's retail sector has huge growth potential in the tier 2 and 3 cities, which has seen the investment of USD 6,192 million in the last 10 years, fuelled by rising disposable income and international airport connectivity, says a report.
According to JLL-CII joint report, the retail sector in tier 2 and 3 cities has witnessed an investment of USD 6,192 million between 2006 and 2017 as against USD 1,295 million that came to tier I metro cities during the period. Besides, factors like lack of available space in retail malls in metro cities, increasing lease rentals and high land prices have made it difficult for retailers to own real estate in these cities, the report said.
On the other hand, international airport connectivity across cities such as Lucknow, Kochi, Bhubaneswar, Nagpur, among others, rising levels of disposable income have prompted various global and local brands to plan their expansion plans in these cities. Chandrajit Banerjee, CII Director General, said: "India's economic potential lies in the growth of smaller cities that have been witnessing transformation on all fronts." He further said while there is an opportunity in tier 2 and 3 cities for this sector, a strong focus is required to build the necessary infrastructure to support the growth.
The study is based on findings on key parameters such as total retail stock, upcoming supply, retailer presence, retailer expansion plans, and investments.