NCR and Hyderabad account for 46% of the total new upcoming supply, closely followed by Bengaluru at 19%
Bengaluru: Developers plan to add nearly 25 million sq ft of new mall space in the top 7 cities over the next 4-5 years, a joint report by real estate consultants Anarock and Retailers Association of India (RAI) said on Wednesday.
The National Capital Region or NCR – as New Delhi and its suburbs are collectively known as – and Hyderabad account for 46% of the total new upcoming supply, closely followed by Bengaluru at 19%.
“The festive season, devoid of restrictions and any fear of the contagion, was exemplary with record high volumes and sales value,” said Anuj Kejriwal, chief executive officer of Anarock Retail.
In 2022, the top 7 cities added 2.6 million sq ft of mall space, witnessing an increase of 27% compared to the previous year. Bengaluru and Hyderabad were the only cities with new supply addition in 2022.
Presently, the top cities have over 51 million sq ft of mall stock across the country with NCR, MMR, and Bengaluru accounting for 62% of the total stock.
“Sales value estimated during the festive season in late 2022 was Rs. 2.5 lakh crore, nearly 2.5 times compared to the previous year. The revival of consumer sentiments and penchant for consumption is therefore being promptly acted upon by the majority of brands, retailers, and mall developers. The new planned mall supply across the top 7 cities is testimony to the developers’ expansion strategy,” added Kejriwal.
The retail sector attracted around $1,473 million between 2019-2022 and the share of organised retail doubled from 9% in fiscal year (FY) 2019 to 18% in FY22, growing at a compound annual growth rate (CAGR) of 20%. The retail market size is expected to touch $2 trillion by 2032, growing from $690 billion in 2021, facilitating the organised retail sector to grow at 25% CAGR.
“The report also highlights that the Indian retail sector attracted around $1,473 million between 2019 and 2022, of which 76% of total investments came in 2019 itself. Among the cities, Hyderabad and MMR accounted for nearly 40% of the total PE investments in the sector,” said Kumar Rajagopalan, chief executive officer of RAI.
Average rentals in malls, increased by nearly 15% in 2022 over the previous year, thus reaching higher than the pre-pandemic levels. Bengaluru registered the highest uptick in rentals of around 27%, followed by Kolkata at 20% in 2022 over the previous year.
As per industry estimates, the e-retail market in India is anticipated to reach $120-140 billion by FY26, increasing at 25%-30% annually over the next five years. The sales volume of the organised retail segment in FY22 was estimated to be $52 billion and is estimated to grow to $136 billion by 2028 with a CAGR of 17%.
Currently, a high degree of integration of physical and digital is taking place to provide an interactive and all-inclusive experience.