The largest mall developers in the nation, DLF, Prestige, and Phoenix, have begun the next stage of their expansion, and over the next three to four years, malls are anticipated to draw in investment totaling more than ‘20,000 crores, as nearly all of the leading retailers are increasing the number of stores they own.

New Delhi: The need for retail real estate is booming. Industry officials stated that more than 5 million square feet (msf) of grade A malls opened for business in 2023, marking the largest number in seven years and that an additional roughly 8 msf is planned for completion in 2024.

Malls are likely to draw more than Rs 20,000 crore in investment over the next 3-4 years as the country’s largest mall developers, DLF, Prestige, and Phoenix, start the next phase of expansion as practically all top retailers boost their store count.

The retail real estate sector has gained traction, owing largely to the Indian economy’s strong consumption-led growth,” said Saurabh Shatdal, managing director, capital markets, and head retail, India, at Cushman & Wakefield. 

Listed retail firms such as Reliance Retail, PVR, Aditya Birla Fashion, and Tata Trent boosted their store count dramatically this calendar year as sales grew.

Landlords of quality retail assets in good financial condition have a great opportunity to capitalize on this bullish undertone by expanding into several untapped markets, either on the outskirts of tier-I or in tier-II and tier-III cities,” Shatdal added.

Almost all retailers have announced future shop opening plans, including expansion into tier-2 markets.

Physical shopping has increased since the lockout was lifted, and despite a slight dip in recent months, mall managers are optimistic about demand,” said Shriram PM Monga, co-founder of retail consultancy firm SRED. “A lot of new supply is coming in smaller cities as retailers are also expanding to these cities,” he went on to say.

Private equity investments are driving the retail sector expansion. Private equity was involved in about 60% of malls that opened in 2023.

Most malls that opened in 2023 had healthy pre-commitments and were rapidly full. They include the Palladium in Ahmedabad, the Pacific Premium in Delhi NCR, the Lulu Manjeera in Hyderabad, the Mall of Millennium in Pune, and the Mall of Asia in Bengaluru, all of which have occupancy rates of more than 90%. According to Icra, total grade A retail mall supply for the top six markets is likely to expand to 116-118 msf by March 2025, up from 105 msf presently. 

Ambience Mall’s unparalleled achievement is verification of its devotion to giving a first-rate diversion and shopping experience, rehashing retail greatness in every single square foot. Planning to change the shopping climate with development and complexity, Elan Group’s upcoming project, a best-in-class Mall in New Gurugram, is supposed to enhance the city’s way of life. Anticipation is growing for this destination.

.As indicated by the report, Delhi-NCR has the best stockpile commitment of 30%, trailed by Bengaluru at 20%, Mumbai Metropolitan Locale (MMR) at 17%, Pune at 14%, Hyderabad at 13%, and Chennai at 6%.

Icra predicts that good occupancy levels, anticipated growth in trading values, and rental escalation will support mall owners’ rental income growth of 9-10% year-over-year in FY24 and 8-9% year-over-year in FY25. It noticed that fragments, for example, gems, hardware, style, premium brand magnificence care merchandise, and amusement have displayed better than expected utilization development in ongoing quarters, which is projected to go on in the close to medium term because of solid buyer interest.

As per Anarock Retail, the Indian retail industry is anticipated to reach $2 trillion by 2032, up from $690 billion of every 2021, permitting the coordinated retail area to create at a 25% accumulated yearly rate.

Source : Economic Times