According to the latest Anarock research, of the total new mall supply, the top seven cities alone will see 69 new malls spread over 35.5 million sq ft area.
In spite of sluggishness in the overall economy coupled with low consumer spending in recent times, mall developers in the country remain bullish on the growth potential of organised retail with close to 100 new malls spanning over 49 million sq ft being lined up across the country by 2022-end.
According to the latest Anarock research, of the total new mall supply, the top seven cities alone will see 69 new malls spread over 35.5 million sq ft area. The remaining 31 malls over 13.5 million sq ft will come up in tier 2 & 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 million sq ft area, followed closely by South India with 35 new malls over nearly 17 million sq ft. The North region will see a supply of 22 new malls spanning over 11 million sq ft. area. East India will see a much more modest supply of seven new malls spread over approximately 3.5 million sq ft.
Anuj Kejriwal, MD & CEO, Anarock Retail, said that year 2019 was defined by significantly lower retail leasing, so the 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.
The retail sector drew over $ 2.8 billion private equity (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, ” he said.
Among the tier 2 & 3 cities, Ahmedabad stands out with as many as six new malls slated to come up by 2022-end. These new malls will be spread over 3.2 million 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 to add four new malls by 2022-end. The western cities of Surat and Nagpur will see new supply of two malls each spread over 0.7 million sq ft and 0.85 million sq ft area.