February 25, 2020
While retailing potential is being well-tapped at airports, there is still great scope for improvement for trains, highways, and bus stations
The report estimated the current transit retail market size in India at approximately US$2.2 billion, with a retail potential of US$5.7 billion
400 train stations are being redeveloped across India on a PPP model, basis which annual passenger traffic will rise to 18.2 billion by 2030
The retail potential currently implies a lease rental opportunity of US$1 billion, which is expected to grow to US$3.2 billion by 2030
The growth and up-gradation of India’s infrastructure will, according to a report released by research and property consultancy firm Knight Frank India, lead to a retail opportunity of nearly US$22 billion across all major transportation hubs by 2030. The majority of organised retail growth in India till 2019 has been due to the growth of dedicated physical and digital marketing platforms. This is now anticipated to be boosted by retail opportunities around the nation’s transport hubs.
While the retailing potential was being well-tapped at airports, there is still great scope for improvement for metros, highways/expressways, and bus stations. The report estimated the current transit retail market size in India at about US$2.2 billion, with a retail potential of US$5.7 billion. The current bottleneck does not lie in passenger traffic, but in the infrastructure required to capture the consumer base. With the Government’s sustained push on infrastructure and greater privatization of transport hubs, the sector will see great growth over the next ten years.
The report adds that the proposed metro network and the mega transformation of Indian railways would open up a US$7.5 billion retail opportunity by 2030. The fourth-largest railway network globally, the Indian Railways carried 8.6 billion passengers in 2019. Certain stations in India are being completely redeveloped on a PPP model, such as the Habibganj Railway Station in Madhya Pradesh, which is being built along the lines of the Heidelberg station in Germany by the Indian Railway Stations Development Corporation Limited (ISRDC) and the Bansal Group. The station plans to include gaming zones, a museum, retail, and food & beverage facilities. Other stations, such as Gandhinagar and Surat in Gujarat, and Baiyappanahalli in Bengaluru, are also following suit.
400 such stations are being redeveloped across India. Based on this and the infra push, annual passenger traffic will increase to an estimated 18.2 billion by 2030. It is also interesting to note that this potential currently implies a lease rental opportunity of US$1 billion. This value is expected to grow to US$3.2 billion by 2030. The earnings through retail outlets at these hubs could also be used towards their maintenance and operation, making transport infrastructure projects more viable.