Optimism Grows in Asia-Pacific Business Landscape, Indian Retail Sector Shines
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Synopsis
A recent report highlights the rising business confidence in the Asia-Pacific region, particularly in India, where the retail sector is thriving due to increased consumer spending and favorable economic conditions.
Key Takeaways
- Business confidence is increasing in the Asia-Pacific region.
- Retail sector in India benefits from rising consumer demand.
- Bengaluru shows low vacancy rates due to high demand.
- Mumbai's office supply has surged, impacting rental rates.
- Inflation rates have seen notable increases recently.
Mumbai, Feb 18 (NationPress) Supported by increased demand and falling interest rates, business confidence is on the rise, positively impacting the retail sector across the Asia-Pacific region, including India, as reported in a recent study.
During the fourth quarter festive season of the previous year, consumer spending saw a significant boost, benefiting retail markets in cities such as Auckland, China, Hong Kong, Bangkok, and Bengaluru.
In Bengaluru, the commercial supply lagged behind demand, resulting in lower vacancy rates, while Mumbai experienced a six-fold increase in office supply year-on-year, contributing to a robust market as outlined in Colliers’ 'APAC Cap Rates Q4 2024' report.
Within Bengaluru, rental and capital rates for Grade A commercial offices along major business corridors have shown a notable increase.
The Outer Ring Road, North Bengaluru, and Whitfield areas experienced a surge in Grade A floorplate transactions, with cap rates stabilizing between 8.0 per cent and 8.5 per cent due to the availability and specifications.
The commercial market in Mumbai has demonstrated substantial year-on-year growth in 2024, with the last quarter marking the highest demand increase for the year. Nevertheless, the rise in supply moderated rental increases, except in select micro-markets where options grew.
According to Ajay Sharma, Managing Director of Valuation Services at Colliers India, Bengaluru has seen enhanced transaction volumes in organized retail, with escalating capital values in high-street areas attributed to increased consumer engagement during the festive season, leading to higher revenue shares.
While Mumbai has recorded a slight year-on-year decline in industrial transaction volumes, market supply has risen by 15 per cent. This has resulted in stable cap rates in Q4 2024. Consumer Price Index (CPI) inflation spiked to 5.22 per cent in December 2024, with the preceding three-month average at 5.63 per cent.
Sharma noted, "This uptick in inflation is linked to the marked rise in urban inflation from Q3 2024."
