Despite low consumer spending in recent times, mall developers remain bullish on the growth potential of organized retail. 100 new malls spanning over 49 mn sq. ft. are scheduled to come up across the country by 2022-end, reveals the latest ANAROCK research. Of the total new mall supply, the top 7 cities alone will see 69 new malls spread over 35.5 mn sq. ft. area. The remaining 31 malls over 13.5 mn sq. ft. will come up in Tier 2 and 3 cities such as Ahmedabad, Lucknow, Indore, Surat and Nagpur, among others.
Region-wise, west and south Indian cities will see almost equal new supply. West India will get 36 new malls over 17.5 mn sq. ft. area followed closely by South India with 35 new malls over nearly 17 mn sq. ft. The North region will see a supply of 22 new malls spanning over 11 mn sq. ft. area. East India will see a much more modest supply of 7 new malls spread over approx. 3.5 mn sq. ft.
“2019 was defined by significantly lower retail leasing, so this generous new upcoming mall supply over the next three years testifies to the confidence of private equity investors in Indian retail’s pent-up potential,” says Anuj Kejriwal, MD & CEO – ANAROCK Retail. “The retail sector drew over USD 2.8 bn PE inflows from 2015-2019-end, 59% by foreign investors alone. Despite overall weak consumer spends, F&B, family entertainment centres, cinemas and beauty/wellness service outlets continue to flourish and demand new retail spaces. Consumer spending will rebound as the government’s concerted intervention to push consumption bear fruit over the upcoming quarters.”
“Besides the tier 1 markets, we are seeing major growth unfolding in Tier 2 & 3 cities. Markets such as Ahmedabad, Lucknow, Nagpur and Indore are seeing high demand from retailers.”
Tier 1 City Mall Supply:
- MMR tops out with 18 new malls spanning 7.8 mn sq. ft.
- NCR comes next with 13 new malls spread over 7.5 mn sq. ft.
- Hyderabad will see the launch of 12 new malls over more than 4 mn sq. ft.
- Bangalore and Chennai will see an infusion of 10 and 9 malls respectively, together accounting for 10.8 mn sq. ft.
- Pune and Kolkata will see 4 and 3 new malls added respectively.
Among the tier 2 & 3 cities, Ahmedabad stands out with as many as 6 new malls slated to come up in the city by 2022-end. These new malls will be spread over 3.2 mn sq. ft. Both domestic and international brands are gung-ho on Ahmedabad; besides scoring high on consumerism, the city has a growing young population of entrepreneurs, IT professionals and factory employees. Lucknow presents a similar picture and has plans for 4 new malls to be added by 2022-end. The western cities of Surat and Nagpur will see the new supply of 2 malls each spread over 0.7 mn sq. ft. and 0.85 mn sq. ft. area.