Reflecting the dynamic evolution of India’s retail sector, driven by increasing urbanization, rising consumer demand, and a robust economy, the completion of organized retail spaces is expected to surge significantly over the next 5 years. Developers increasingly prioritize larger retail centres to cater to modern shoppers seeking unique experiences. According to JLL India, the top 7 cities, Mumbai, Delhi-NCR, Bengaluru, Hyderabad, Pune, Kolkata, and Chennai, will add over 45 million sq. ft of retail real estate through 88 new developments, surpassing the 38 million sq. ft supplied in the past decade (2014-2023). The current retail stock of 89 million sq. ft is projected to grow by 50% to 134 million sq. ft by the end of 2028. Retail assets remain attractive to large foreign institutional investors, with 16% or 7.2 million sq. ft of the new supply owned by institutional players, according to Head of Office Leasing Advisory and Retail Services, India, JLL, Mr. Rahul Arora.
The majority (78%) of the upcoming 45 million sq. ft retail supply is lease-based, allowing developers greater control over tenant quality and property management, enabling higher rentals. Chairperson of the Shopping Centres Association of India (SCAI), Ms. Pushpa Bector, noted that developers are avoiding strata sales due to the poor performance of grade C malls, preferring to retain control and operate the malls themselves for better decision-making and performance. The average size of new retail supply, around 391,099 sq. ft over the past decade, is expected to increase by 30% to 507,341 sq. ft by 2028. Of the 88 upcoming retail developments, 12 will be large-sized, each with at least 1 million sq. ft, accounting for 37% of the total supply expected by 2028, up from the previous decade’s 27%, according to Chief Economist and Head Research & REIS, India, JLL, Mr. Samantak Das. This trend towards larger, experience-led developments is driven by increasing global travel and exposure, heightening demand for unique retail experiences. Delhi NCR is expected to lead with 43% of the new supply, followed by Hyderabad with 21% and Chennai with 13%.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.
