Shopping malls expanded despite Covid restrictions | The Financial Express

Shopping malls expanded despite Covid restrictions

According to the firm, retail sales in malls across the top eight cities grew at a CAGR of approximately 3% to reach $8 billion in FY22, while in FY23, the potential consumption is estimated to surpass the pre-Covid levels to reach $11billion.

Shopping malls expanded despite Covid restrictions
The eastern and northern regions witnessed a strong recovery in consumption reaching new heights by crossing the pre-pandemic levels in March 2022.

The pandemic may have restricted shoppers from visiting malls but could not stymie their expansion. As many as 16 new shopping malls, comprising 15.5 million square feet of leasable area, became operational in the last 30 months, data released by property consultant Knight Frank India showed.

Sample this: In the pre-Covid period of December 2019, there were 255 malls with gross leasable area of 77.4 million sq ft across eight cities of Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, National Capital Region (NCR), and Pune. At the end of the first six months of the current calendar year, the total mall stock stands at 92.9 million sq ft, spread across 271 operational malls in the same markets.

“An incremental supply of 15.5 million sq ft was added in the 30 months, despite the disruption of the pandemic,” Knight Frank said in the report released on Tuesday.

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At present, NCR contributes 34% of total mall stock, while Mumbai 18% and Bengaluru 17%.

Knight Frank said that retail sales in malls across these top eight cities are expected to grow 29% annually to reach $39 billion by 2027-28 on the back of growth in consumption which would fuel growth of more malls.

According to the firm, retail sales in malls across the top eight cities grew at a CAGR of approximately 3% to reach $8 billion in FY22, while in FY23, the potential consumption is estimated to surpass the pre-Covid levels to reach $11billion.

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The eastern and northern regions witnessed a strong recovery in consumption reaching new heights by crossing the pre-pandemic levels in March 2022. The eastern region registered a significant increase in index value from 100 (as a base index as of March 2019) to an index value of 123 at the end of March 2022. The consumption index in the northern region increased to 118 during the same period. The southern region registered a steady improvement in recovery crossing the pre-pandemic levels and registering an index value of 108, whereas the western region took the worst hit due to tighter restrictions and consumption was marginally less than the pre-Covid levels (index value of 99) at the end of March 2022.

Shishir Baijal, chairman and managing director at Knight Frank India, said, “The retail real estate sector has reached a new level of maturity where smaller sized and lower grade developments are giving way to Grade A malls. The existing Grade A malls have over 95% occupancy which is indicative of the demand for quality real estate in this segment.”

Vivek Rathi, director research of Knight Frank India, said that fresh supply of retail space in malls is estimated at 50-55 million sq ft in the next six years, and this will drive growth in sales at shopping centres.

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