It is anticipated that mall operators’ rental income will rise 9-10% year-on-year in the current financial year and a slightly lower 8-9% in 2024-25, driven by robust occupancy levels, trading value growth, and rental escalations. Across India’s top six cities, a new supply of 9-10 million sq ft and approximately 6 million sq ft is expected in 2023-24 and 2024-25, respectively. Despite healthy net absorption in the first three quarters of the financial year, vacancy levels increased to 20% as of December 2023 due to recent operational new supply that is yet to reach full capacity. ICRA forecasts occupancy levels to be sustained at 81-82% by March 2024 and improve to 82-83% by March.
Vice President and Co-Group Head Corporate Ratings at ICRA, Mr. Anupama Reddy, stated that retail mall operators experienced a significant rebound in FY2023 regarding footfalls and trading values, with this trend continuing in the first nine months of FY2024. With expected footfall growth, increased spending due to premiumization, and strong urban consumption, ICRA projects trading values to increase by 14-15% in FY2024 and record a 10-12% expansion in FY2025 on a high base.
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