New Pan-India Retail Mall Supply in 2021 Double Of 2020

New Pan-India Retail Mall Supply in 2021 Double Of 2020
Oct 2021 , by , in Interviews

Pankaj Renjhen, COO & Jt. MD – ANAROCK Retail says, approx. 4.5 Mn sq. ft. of new supply is planned for 2021.

After a severely rough patch in 2020 due to the unprecedented lockdowns, the overall growth prospects for shopping malls remain intact. Organized retail penetration in India is less than 10% compared to the developed nations such as the US and UK at 85% and 80%, respectively.

Per capita organized retail space in India is approx. 2 sq. ft per person compared to the US at 23 sq. ft. per person and Dubai at 16 sq. ft. per person. India’s per capita income is USD 1,961 and has grown 12% in the past 5 years.

“Improving consumer confidence and a resilient long-term retail growth story translates into higher shopping spending, which reflects in the mall space scheduled for deployment in 2021. As per ANAROCK research, approx. 4.5 Mn sq. ft. of new supply is planned for 2021. This new supply will be spread across tier I and tier II cities of India, with tier I cities accounting for around 90% of the space. Approx. 85% of the upcoming malls are likely to be added in tier I cities, and 15% in tier II & tier III cities,” said Pankaj Renjhen

Noida in NCR has around 1.1 Mn sq. ft. of new space planned for 2021, across 3 malls. NCR – the region where the mall story kicked off in a big way more than a decade ago – is back in action with new malls planned for this year. The sheer geographic spread and the population of this region support the mall development here.

Bengaluru – the prominent city of South India – is likely to witness new space completion of 1.22 Mn sq. ft., spread across 2 malls. This city is primarily driven by IT-ITeS companies whose business hasn’t been negatively impacted by the pandemic outbreak. As a result, the consumption pattern in the city is likely to improve in future periods.

Mumbai, the financial and commercial capital of India, is likely to add only 1.1 Mn sq. ft. of new space spread across 3 malls. The city has witnessed significant mall supply addition in the recent past and so it seems to be going slow for now. Also, COVID has rampaged the lives and livelihoods of many in the city and as a result, the real estate developers seem to be cautiously treading ahead.

Lucknow and Amravati are among the tier II cities which collectively have nearly 4.7 Lakh sq. ft. of mall space addition planned for 2021, across 2 malls.

Investors Upbeat on Retail

Considering that the long-term future of organized retail in India looks secure, investments continue to flow into the segment. In June 2021, Phoenix Mills Ltd and GIC partnered to establish a USD 733 Mn investment platform for retail-led mixed-use assets in India. In March 2021, Blackstone concluded Prestige’s retail & commercial assets’ acquisition for USD 1.5 Bn. During the pandemic, Reliance Retail raised INR 47,265 Cr by selling a 10.09% stake to investors such as Silver Lake Partners, KKR, ADIA, and others.

No Looking Back

The Indian retail sector is witnessing accelerated organization. As per industry estimates, organized retail is growing at a 20-25% CAGR per year, and the comeback of new retail mall supply bodes well for the sector.  “A Pan-India comparison of retail mall supply additions planned for 2021 depicts more than double growth over the previous year. The Indian economy is likely to regain its growth trajectory as the COVID-19 effect recedes. As per IMF estimates, India is likely to grow at 9.5% in FY22 – the fastest globally,” says Pankaj Renjhen

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