Huge realty opportunity in modern retail at Hyderabad: Knight Frank

HYDERABAD: Hyderabad throws up a huge opportunity for modern retail with its high spending capacity and extremely low retail penetration among the top seven cities, says Knight Frank in its latest report

According to Knight Frank’s report titled ‘Hyderabad Retail: Unlocking The Potential,’ while retail spending stood at Rs 384 billion in 2015, much higher than Pune and Chennai, the modern retail penetration, mainly identified by small sized supermarkets, developed high streets and malls is abysmally low at 9%, the lowest among the top seven cities.

Samantak Das, chief economist and national director, research, Knight Frank said, “Hyderabad at 9% has the least penetration of modern retail compared to the top seven cities in India. This in itself is a big opportunity for retailers and real estate developers and we estimate that modern retail in the city is expected to grow at a CAGR of 23% between 2015 and 2019 from Rs 36 billion to Rs 86 billion. The manifestation of existing high street shops into modern outlets and increasing e-tailing activities.”

It is estimated that by 2040, modern retail penetration in Hyderabad will increase to 50% from the current 9%, with both brick and mortar and e-tail formats contributing significantly to the growth. Locations like Abids, Panjagutta and Begumpet in the central zone offer the highest opportunity for modern retail across all product categories. Uppal in the East is a location that is likely to experience modern retail growth.

Vasudevan Iyer, director, Knight Frank, Hyderabad said, “Hyderabad has emerged as a sought-after retail market in the last couple of years with a number of national and international giants like IKEA desiring to set up stores in the city. While there is a great potential for overall growth in the brick and mortar retailing methods, proper implementation of state level policies is a must to make retail business conducive.”

Credits ET Realty

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