Real estate is not a single industry but consists of asset classes such as residential, commercial and retail. All these categories are inter-related and depend on each other to drive growth.
Residential projects tend to crop up around commercial office catchments, because that is where jobs are created, and employment drives the financial ability and appetite for homeownership,” says Anuj Puri, Chairman – ANAROCK Property Consultants.
Likewise, retail real estate developments are only feasible in and around residential and commercial catchments, since retail needs customers, he points.
In a recently published analysis he writes that what differs in these asset classes are the ticket sizes, investment rationale, and investment horizon.
“To invest in residential, retail or commercial office real estate calls for different degrees of financial capacity, risk appetite, patience and understanding of what drives growth in each of these asset classes,” he writes.
Among the various interplays among these categories, the relationship between residential and retail is particularly interesting. In any given location, a certain type of retail follows (or sometimes even spawns) a corresponding type of housing.
An area which primarily houses middle-class families will attract a lot of unorganized or mom n’ pop retail outlets, hypermarkets which enable value shopping for daily needs, and malls with a lot of mainstream brands. Likewise, luxury housing destinations are most logically juxtaposed with high-end retail.
At the same time, India’s urban real estate landscape cannot really be clearly defined in terms of mid-income and luxury housing, as a significant number of residential areas in our cities are home to both middle-class and HNI residents.
Luxury begets luxury. Some notable instances are given below:
Indiranagar, Bangalore: The high street retail area in this location is located in an upscale residential precinct. The stretch has a good mix of F&B and fashion retail, attracting the affluent population. Its strategic location has been the main growth catalyst for the retail market. The prime residential areas in and around contributes to the steadily growing footfalls along this stretch, where IT parks and offices are also located.
Galleria Market, Gurgaon: This is an upscale neighbourhood shopping area juxtaposed with one of the most developed areas of Gurgaon where plotted developments, residential colonies and high-rise apartment complexes coexist. Galleria Market has a mix of fashion and mainstream retail stores offering convenience-based categories in addition to F&B.
Hiranandani Estate, Powai (Mumbai): The iconic Hiranandani Estate is very close to major commercial office destinations within the Powai precinct. Nestled amidst high-end residential apartments and landmarks like the Powai Lake, it attracts footfalls from upper-middle-class to HNI residents.
Mehar Chand Market, Delhi: This market is situated near Lodhi Colony in the heart of New Delhi and is more or less a ’boutique’ shopping destination for residents living around it. It includes an eclectic mix of retail categories such as designer stores, organic grocery stores, quirky apparel stores, trendy bistros and stationery shops, among others. It attracts steady footfalls as it is surrounded by the upmarket residential neighbourhood of Jor Bagh, Defence Colony, Golf Links and Sunder Nagar.
Road No. 36 Jubilee Hills, Hyderabad: It is a prime and upscale shopping street. It is a traditionally posh area. Due to its location, this high street has attracted a number of national and international retail brands, as well as exclusive cafes and restaurants.
Breach Candy, Mumbai: This is one of the core South Mumbai areas known for its elite high-end residential neighbourhood. Most shoppers belong to the immediate or nearby catchment areas. Breach Candy hosts some of the legacy high street brands and has attracted a lot of local high-end fashion designers, as well.
Although there is no pre-determined town planning involved, Indians can nevertheless match their shopping preferences with their inherent purchasing power. Like water, lifestyle appears to always find its own level in the country.