MALL DEVELOPERS ARE ALSO INTEGRATING ENTERTAINMENT, LEISURE AND DINING OPTIONS
Rising urbanisation, growth in consumer demand & robust economy seen as
Mumbai: Completion of organised retail spaces is expected to accelerate in the next five years, reflecting the dynamic evolution of India’s retail sector marked by growing urbanisation, rising consumer demand and a robust economy.
In response to evolving preferences of modern shoppers seeking unique experiences, developers are also increasingly prioritising development of larger retail centres integrating entertainment, leisure activities, and dining options.
The top seven cities of Mumbai, Delhi-NCR, Bengaluru, Hyderabad, Pune, Kolkata, Chennai are expec- ted to collectively add more than 45 million sq ft of retail real estate through 88 new developments. This anticipated growth will outstrip re- tail space supply of 38 million sq ft added in the decade through 2023, showed data from JLL India.
Retail Boom
45m sq ft to be added via 88 new developments in Mumbai, Delhi-NCR, Bengaluru, Hyderabad, Pune, Kolkata, and Chennai
43% share of new retail space additions in Delhi NCR alone, followed by Hyderabad and Chennai
Developers shifting from strata sales to self-operated models for better mall performance
30% increase up to TMM 507,341 sq ft by 2028: Average size of new retail spaces recorded
“The current retail stock of 89 mil lion sq ft is projected to grow 50% to 134 million sq ft by end-2028. Retail assets remain an attractive investment avenue for large foreign institutional investors, who are increasingly opting for greenfield and brownfield development platforms. Notably 16% or 7.2 million sq ft of the new supply is owned by institutional players,” said Rahul Arora, head of office, leasing advisory and retail services, India, JLL.
As much as 78% of the new retail supply of 45 million sq ft will be lease-based, allowing developers to have greater control over the quality of tenant mix and day-to-day management of the property, enabling them to command higher rentals.
“Strata sales of assets have been one of the causes of most grade C non-performing malls, leading deve- lopers to avoid this model now. Instead, developers prefer to retain control and operate the malls themselves, ensuring better decision-making and high her performance,” said Pushpa Весtor, chairperson, Shopping Centres Association of India (SCAI).
Over the past decade, the average size of new retail supply was around 391,099 sq ft, which is expected to increase by 30% to 507,341 sq ft by 2028.
“Of the 88 upcoming retail developments in the next five years, 12 will be large-sized, each with at least 1 million sq ft. These will account for 37% of the total supply expected by 2028, a notable increase from the previous decade’s 27%,” said Samantak Das, chief economist and he- ad, research & REIS, India, JLL.
