‘Retail biz at transport hubs may grow to USD 21.6 bn’
Date :26-Feb-2020
Business Bureau :
RETAIL opportunities at transport hubs like airports, railways, metro, highways are expected to grow to USD 21.6 billion by 2030, according to a survey by property consultant Knight Frank. As per the survey, this growth is attributable to a healthy growth in passenger traffic as well as transport infrastructure in the country. It noted that the total retail opportunity across various transport hubs in India, such as airports, highways and bus stations, metro , railways, will grow manifold in new decade. “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 the country,” Knight Frank India Chairman and MD Shishir Baijal said. As per the survey, the current size of transit retail in India is estimated at USD 2.2 billion and is expected to grow to USD 21.6 billion by 2030. “While the retailing potential is best tapped at airports, it is still at a nascent stage for other modes like metros, railways, highways and bus stations.
A large part of the retail opportunity at transit hubs is currently untapped due to lack of retail infrastructure at these nodes,” the survey noted. The large retail potential translates into lease rental opportunity of USD 1 billion, which is estimated to grow to USD 3.2 billion by 2030. “Considering the current lease rent opportunity, the government can potentially monetise these transit-oriented retail assets to generate funding to the tune of USD 10 billion. Such monetisation will reduce dependencies on passenger tariffs and develop the retail eco-system for a largely unexplored territory.
This will also open a new revenue stream for future infrastructure developments,” Baijal said. He further said 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.’ “In India, retail real estate growth has by far been most sensitive to domestic and global conditions. With organised retail still only a fraction of the total retail market in India while having of the largest population base, there is ample scope of growth in the country,” Baijal noted.
Most of organised retail growth in India so far has been based out of mall developments with sales heavily dependent on footfalls and conversions thereafter. However, 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,” he added.