New supply stocks of retail space across seven cities, including Mumbai, in India increased by over 72 per cent in the last one year with a total of 59.78 lakh sq ft available space, according to Cushman and Wakefield, a real estate services firm.
In 2023, 11 malls became operational covering 59,48,395 sq ft space across seven cities. Hyderabad had three, Pune and Chennai had two each and one mall each came up in Mumbai, Delhi-NCR, Bengaluru and Ahmedabad.
Experts say by 2027, new supply of retail chains is expected to rise by 43 per cent across Delhi NCR, Mumbai, Pune, Bengaluru, Kolkata, Chennai, and Hyderabad.
Heavy investments in malls
Malls are expected to attract an investment of Rs 20,000 crore over the next three to four years as the country’s biggest mall developers DLF, Prestige and Phoenix have entered the next stage of expansion.
This expansion of retail space is powered by private equity investments. Almost 60 per cent of malls that commenced in 2023 have private equity participation. Most malls that started last year have 90 per cent occupancy rates.
India's retail sector evolution
According to a report by JLL India, a real estate services firm on 'India Retail: Evolving to a New Dawn’, "The retail sector is expected to see an addition of approximately 40 million square feet of shopping mall stock between H2 2023 and end-2027 among just the top seven cities”.
The study adds that more than 24 new global brands from across retail categories entered India in the last two years making a beeline for superior quality mall developments.
“India continues to be the preferred destination for international brands and most brands have opened their first stores in India at high-grade retail developments in Delhi NCR and Mumbai”, the report says.
The findings also show that physical stores still play a vital role in providing experiential shopping and social connect experiences to consumers.
According to a study by Anarock, a real estate services firm, stores today are more about experience than merchandising.
Rise of highway retail concept
With infrastructure augmentation, the JLL report has forecast the arrival of factory outlet malls on highways complete with food and beverages courts and movies to make shopping a total experience.
“Highway retail is a new concept and will be a big growth driver for the retail sector to fight e-commerce rivals in a market that is driven by discounting. At least half a dozen factory outlet malls are being planned. This concept is expected to gain popularity. These malls will house factory outlets of premium brands like Nike, Calvin Klein, Sketchers, Tommy Hilfiger, Adidas and will have the right environment complete with F&B and movies. Retail will no longer be limited to malls and high street but will move to the highways”.
