Mumbai: While there has been a significant drop in the fresh supply of retail mall space in 2017, the top eight cities in India are likely to add 34 new malls by 2020 as traditional brick and mortar retail players are fast regaining their lost momentum.
According to global property consultant Cushman & Wakefield, around 13.63 million square feet of retail malls are under construction, which would add approximately 20 per cent to the total available mall inventory in these cities.
Private equity players have invested a total of Rs 7,959 crores in malls between January 2016 and September 2017.
The total new supply of retail mall space during January-September 2017 stood at 1.9 million sqft, down 63 per cent from 5.3 million sqft recorded in 2016. However, mall space leasing during the same period saw an upward trend during the same period suggesting fresh expansion by leading retail brands.
After a prolonged period of slow growth, the property consultant noted that the retail sector has regained momentum and its trust in the traditional brick and mortar retail space, which is likely to play a key role in the future growth of the sector.
Increasingly it is understood that retail malls will continue to hold importance as a ‘destination’ going beyond stores and selling.
Consequently, even e-commerce companies are establishing a physical presence through ‘experience’ stores in many malls and on prominent high streets.
“With foreign retailers entering the country and expanding aggressively, brands are preferring to be located in malls that are likely to see higher occupancy levels. Hence, over the next few years, investors will be on a lookout for professionally managed, well-run malls that would witness yields improving and rental values inching up, thereby improving returns for investors,” said Anshul Jain, country head and managing director, India, C&W.
Hyderabad will be witnessing the largest number of new retail malls at 11, more than doubling its current mall inventory of under 3 msf to over 6 msf by 2020.
The additional new malls will be spread across the city in areas of Madhapur, Gachibowli, Panjagutta, Begumpet, and Uppal amongst others.
Delhi NCR and Bengaluru will each add eight and six new malls, contributing about 4 msf and 3 msf of additional mall spaces respectively by 2020.
Chennai is expected to see six new malls whereas Mumbai and Kolkata would be adding two malls each by 2020.
The only city that is not expected to see any change in their current mall scenario will be Ahmedabad where, as of now, there are no new announced projects for malls.
