Exploring the Surge in Shopping Mall Space Across India’s Top Cities
Cushman & Wakefield data shows that a surge in retail demand has led to an increase in the supply of retail space in shopping malls has increased by a significant 72% In 8 major cities of India, Last year, nine malls were completed across eight markets with a total area of 3,449,222 square meters While the wave of e-commerce is impacting retail, brick-and-mortar retail is making a strong comeback in major cities where online customers continue to prefer in-person shopping experiences
The outlook for 2023 was optimistic as new shopping malls, totaling an area of 59,48,395 square meters, were scheduled to open in 11 locations across 8 metropolises. Noteworthy completions included three malls in Hyderabad, two each in Pune and Chennai, and one each in Mumbai , Delhi-NCR, Bangalore, and Ahmedabad. However, there were no new deliveries to retailers in Kolkata
According to JLL India’s research report ‘Indian Retail: Evolving to a New Dawn’, the retail real estate sector is witnessing a major boom. The report predicts a 43% increase in retail real estate space across seven major cities by 2027.
Developers are expanding their operations and focusing on creating innovative built environments, strengthening consumer connections, and establishing physical stores in underserved areas such as tier 1 and tier 2 cities
Key market insights show that in terms of total retail inventory, Delhi-NCR leads with 28 million sq ft, followed by Mumbai with 17 million sq ft and Bengaluru with 14 million sq ft
The retail development pipeline in the top seven cities is expected to exceed 38 million sq ft from 2023 to 2027, with Delhi-NCR accounting for 31% of the total supply
Mall developers like DLF, Prestige and Phoenix are expected to attract investments of over Rs 20,000 crore in the next 3–4 years
A significant portion of the growth in retail space is being driven by private equity investments, with almost 60% of malls opening in 2023 having private equity investments
The success of malls such as Palladium in Ahmedabad, Pacific Premium in Delhi-NCR, Lulu Manjeera in Hyderabad, Mall of Millennium in Pune and Mall of Asia in Bangalore with over 90% occupancy rate has encouraged positive development in the retail sector
ICRA predicts that the supply of Class A malls will expand significantly from 116 million sq ft to 118 million sq ft by March 2025
Retailers such as Reliance Retail, PVR, Aditya Birla Fashion and Tata Trent have significantly increased their store count in response to growing consumer demand for an improved physical shopping experience
This trend is also leading to retailers focusing on larger physical stores and moving to larger store sizes in various categories
The rise of outlet malls in India is also noteworthy, mirroring trends in the US and UK
Several factory outlet centers are in the planning stages and will offer discounts on premium brands throughout the year
The changes are expected to improve the shopping experience, with luxury brands such as Lacoste expressing optimism about the new format
As retail continues to evolve, there is increasing focus on expanding beyond malls and high streets
The concept of a factory outlet mall on a highway with dining options and recreation areas is gaining traction
This approach is expected to transform the retail industry in the coming years, providing a holistic shopping experience.
Finally, this blog highlights the dynamic revival of the retail sector in major cities of India, highlighting the growth in physical retail spaces, emerging trends and their transformative impact on the overall retail industry
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Source : Economic Times
