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25 mn-sft mall space to come up across top 7 cities in 5 yrs
25 mn-sft mall space to come up across top 7 cities in 5 yrs
Driven largely by rising consumption, the rebound in Indian retail market has been exemplary in 2022 which is favourably impacting retail real estate across the country.
Hyderabad: Driven largely by rising consumption, the rebound in Indian retail market has been exemplary in 2022 which is favourably impacting retail real estate across the country. Buoyed by the growth, developers now plan to add nearly 25 million sq ft of new mall space across the top seven cities over the next 4-5 years, says a joint report by real estate consultants Anarock and Retailers Association of India (RAI).
According to the report titled 'India Retail Real Estate: REvived, REshaped, & REinforced' released at the Retail Leadership Summit 2023, NCR and Hyderabad account for nearly 46 per cent of the total new upcoming supply, closely followed by Bengaluru at 19 per cent. Back in 2022, the top seven cities added over 2.6 million sq ft of mall space which was 27 per cent more than the preceding year.
"The festive season, devoid of restrictions and any fear of the contagion, was exemplary with record high volumes and sales value," says Anuj Kejriwal, CEO & MD of Anarock Retail. "Sales value estimated during the festive season in late 2022 was Rs 2.5 lakh crore, nearly 2.5 times compared to the previous year."
He further adds, "The revival of consumer sentiments and penchant for consumption is therefore being promptly acted upon by the majority of brands, retailers, and mall developers. The new planned mall supply across the top 7 cities is testimony to the developers' expansion strategy. The retail market size is expected to grow at 25 per cent to reach $2 trillion by 2032, from $690 billion in 2021."
Kumar Rajagopalan, CEO, Retailers Association of India (RAI), says, "The report also highlights that the Indian retail sector attracted around $1,473 million between 2019 and 2022, of which 76 per cent of total investments came in 2019 itself. Among the cities, Hyderabad and MMR accounted for nearly 40 per cent of the total PE investments in the sector."
"Data further indicates that back in 2022, the top 7 cities added nearly 2.6 million sq ft of mall space during 2022, which increased by 27 per cent over the previous year (2021)," says Rajagopalan. "Among the cities, Bengaluru and Hyderabad were the only cities which saw new mall supply addition during 2022."
Presently, the top cities have over 51 million sq ft of mall stock across the country with NCR, MMR, and Bengaluru accounting for 62 per cent of the total stock. The average rentals in malls appreciated 15 per cent in 2022 to touch above the pre-pandemic levels. Bengaluru registered the highest uptick in rentals of around 27 per cent, followed by Kolkata at 20 per cent in 2022 over the previous year.
As per industry estimates, the e-retail market is anticipated to reach $120-140 billion by FY26, increasing at 25-30 per cent annually over the next five years. The sales volume of the organised retail segment in FY22 was estimated to be $52 billion and is estimated to grow to $136 billion by 2028 with a CAGR of 17 per cent. Currently, phygital sales are taking place to provide an interactive and all-inclusive experience.
