Developers plan to add nearly 25 million sq ft of new mall space across the top 7 cities over the next 4-5 years, according to a joint report by ANAROCK and Retailers Association of India (RAI). The retail industry rebound in 2022 driven by rising consumption is leading to the retail real estate growth in the country. “The revival of consumer sentiments and penchant for consumption is therefore being promptly acted upon by the majority of brands, retailers, and mall developers,” said Anuj Kejriwal, CEO & Managing Director, ANAROCK Retail.
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, Kejriwal said in the report. The retail market size is expected to touch USD 2 trillion by 2032, growing from USD 690 billion in 2021, facilitating the organised retail sector to grow at 25 per cent CAGR, he added. The 7 cities covered in the report are Mumbai Metropolitan Region, Delhi NCR, Pune, Bengaluru, Hyderabad, Chennai and Kolkata.
Regions to witness most additions
Among the regions, NCR & Hyderabad account for 46 per cent of total new upcoming supply, followed by Bengaluru at 19 per cent. In 2022, the top 7 cities added around 2.6 million sqft of mall space, an increase by 27 per cent from 2021. Among these top cities, Bengaluru and Hyderabad were the only ones with new supply additions in 2022. Currently, the top cities comprise over 51 million sqft of mall stock across the country with NCR, MMR, and Bengaluru accounting for 62 per cent of the total.
The demand for mall spaces have increased even as rentals in malls appreciated by nearly 15 per cent, which is higher than the pre-pandemic levels. While Bengaluru registered the highest uptick in rentals of around 27 per cent, Kolkata witnessed a hike of around 20 per cent in 2022 over the previous year. “The Indian retail sector attracted around USD 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,” said Kumar Rajagopalan, CEO, RAI.
While the share of organised retail doubled from 9 per cent in FY19 to 18 per cent currently, online retail in the country comprises approximately 25 per cent of total organised retail market and this is likely to go over 37 per cent by 2030. The sales volume of organised retail in FY22 was estimated to be USD 52 billion and is expected to grow to USD 136 billion by 2028, said the report. On similar lines, e-retail market is also anticipated to increase at 25-30 per cent annually over the next five years to reach US$ 120-140 billion by FY26.