Bullish on Malls

Strong growth anticipated across the country. 

New malls will require vertical transportation (VT), and that’s good news for both domestic and foreign VT players in India. . . . Editor

Indian cities are set to add 100 new malls by the end of 2022. Despite low consumer spending in recent times, mall developers remain bullish on the growth potential of organized retail. Approximately 100 new malls spanning more than 49 million ft² are planned across the country by the end of 2022.

Of the total new mall supply, the top seven cities alone will see 69 new malls spread over 35.5 million ft². The remaining 31, covering 13.5 million ft², will come up in tier-2 and -3 cities, such as Ahmedabad, Lucknow, Indore, Surat and Nagpur. Western and southern Indian cities will see almost equal new supply. Western India will get 36 new malls covering 17.5 million ft², followed closely by southern India, with 35 new malls spanning nearly 17 million ft². The northern region will see 22 new malls spanning more than 11 million ft². Eastern India will see a much more modest supply of seven new malls spread over approximately 3.5 million ft². Anuj Kejriwal, managing director and CEO, ANAROCK Retail, observed: 

“ Consumer spending will rebound as the government’s concerted intervention to push consumption bears fruit over the upcoming quarters.” — Anuj Kejriwal, managing director and CEO, ANAROCK Retail

“2019 was defined by significantly lower retail leasing, so this generous new upcoming mall supply over the next three years testifies to the confidence of private-equity (PE) investors in Indian retail’s pent-up potential. The retail sector drew more than US$2.8 billion in PE inflow in 2015-2019 — 59% by foreign investors alone. Despite overall weak consumer spending, food and beverage outlets, family entertainment centers, cinemas and beauty/wellness service outlets continue to flourish and demand new retail space. Consumer spending will rebound as the government’s concerted intervention to push consumption bears fruit over the upcoming quarters. Besides the tier-1 markets, we are seeing major growth unfolding in tier-2 and -3 cities. Markets such as Ahmedabad, Lucknow, Nagpur and Indore are seeing high demand from retailers.”

By 2022, Tier 1 cities’ mall supply will consist of:

• The Mumbai Metropolitan Region, topping out with 18 new malls spanning 7.8 million ft²

• National Capital Region, with 13 new malls spread over 7.5 million ft²

• Hyderabad will see the launch of 12 new malls spread over more than 4 million ft².

• Bangalore and Chennai will see an infusion of 10 and nine malls, respectively, together accounting for 10.8 million ft².

• Pune and Kolkata will see four and three new malls, respectively.

Among tier-2 and -3 cities, Ahmedabad stands out with as many as six new malls slated to come up in the city by the end of 2022. These new malls will be spread over 3.2 million ft². Both domestic and international brands are gung-ho on Ahmedabad. Besides scoring high on consumerism, the city has a growing population of young entrepreneurs, information-technology professionals and factory employees. Lucknow presents a similar picture and has plans for four new malls by the end of 2022. The western cities of Surat and Nagpur will see two new malls each, spread over 0.7 million ft² and 0.85 million ft², respectively.