NEW DELHI :
India’s transit retail segment will grow from the current $2.2 billion to $21.6 billion by 2030, riding on healthy growth in passenger traffic and transport infrastructure, international property consultancy Knight Frank India said. A report, titled Catch Them Moving, projects healthy growth across various transport hubs, including airports, highways and bus stations, Metros and the railways over the next decade.
While the retailing potential is best tapped at airports at the moment, at Metros, highways and bus stations, it is still at a nascent stage, it said. A large part of the retail opportunity at transit hubs is currently untapped due to lack of retail infrastructure at these nodes, the report said. The sector’s lease rental opportunity, which is currently at $1 billion, is estimated to grow to $3.2 billion by 2030, according to the report.
Further, the government can potentially monetize these transit-oriented retail assets to generate funding of around $10 billion. Such monetization will reduce the dependency on passenger tariffs and develop the retail ecosystem for a largely unexplored territory, besides opening up a new revenue stream for future infrastructure development.
Shishir Baijal, chairman and managing director, Knight Frank India, said: “India is going through an infrastructure revolution. The government’s focus on developing and modernising the transport modes including airports, railway stations, metro and highways is opening up unprecedented opportunities for the organised retail segment in India. The development of retail infrastructure at key transportation nodes through a public private partnership has presented huge opportunities to operators and retailers to monetise the potential of guaranteed footfalls with ‘wait time’."
He added that in India, retail real estate growth has been sensitive to domestic and global conditions. However, given that organised retail is still only a fraction of the total retail market in India, there is ample scope of growth. Most of the organized retail growth in India so far has been out of mall developments with sales heavily dependent on footfalls and conversions thereafter. “The advent of transit retail will provide retailers with captive audience that is willing to spend. Having said this, the transport hubs will have to create appropriate space with prominence and visibility, smart revenue models and correct product mix to ensure that retailers see value in their presence in a transport hub," Baijal added.
The report said transport terminals offer guaranteed footfalls daily. “A good terminal would try to subtly encourage passengers into shops and eating joints on the way as part of their journey. Other than designs related to core travel, it is always better to consider early in planning and design of a terminal, factors such as passenger flow through the terminal, spend profile, layout, size and presentation of the shops or units, product mix, etc.," said Rajeev Vijay, executive director (government and infrastructure advisory) at Knight Frank India.