Kolkata, May 13 (UNI) In India’s ongoing golden era of retail expansion, consumer demand and retail real estate supply are on an unprecedented growth trajectory, according to a latest study conducted by ANAROCK, a pan-India real estate consultant.
The report said the rising consumption is driving a surge in new mall supply in Tier 1 over the next two years - latest ANAROCK Research estimates that over 16.6 Mn sq. ft. of new Grade A mall supply will enter the top 7 cities over 2025 and 2026.
With a combined 65 percent share of this supply, Hyderabad and Delhi-NCR will command the lion's share, underscoring the shift of focus to high-growth consumption hubs.
This surge is part of a broader pipeline that could add more than 40 million sq. ft. of retail space by 2029 across major urban centres.
" The surge is also prompted by a perceivable shortfall in the new supply of Grade A malls across cities. The previous three-year data trends show that new mall supply in the top 7 cities did not match the overall leasing. In 2022, these cities witnessed approximately. 2.6 Mn sq. ft. of new Grade A retail supply, while leasing clocked in at approximately 3.2 Mn sq. ft. Likewise, 2023 saw 5.3 Mn sq. ft. of new Grade A mall supply, while 6.5 Mn sq. ft. were leased," ANAROCK CEO & MD Anuj Kejriwal said on Tuesday.
The demand-supply gap widened further in 2024 due to approvals slowing down because of general and state elections.
"New Grade A mall supply in 2024 was just 1.1 Mn sq. ft., while leasing was 6.5 Mn sq. ft..," says Kejriwal. "The data speaks for itself."
While the estimated new supply to some extent raises the spectre of potential oversupply, current absorption trends are reassuring. ANAROCK data pegs total mall leasing over the next two years at >12.6 Mn sq. ft. across the top 7 cities. Both mall developers and retailers are showing resolute confidence, spurred by strong leasing and positive consumer sentiments.
"The strong leasing rate is also prompted by the entry of over 60 international retail brands in India over the last four years across categories like fashion, electronics, lifestyle, & F&B," adds Kejriwal.
"This has accelerated demand for high-grade organized retail spaces, particularly in high-footfall zones like malls and high streets."
Data also indicates that with the demand-supply imbalance of previous years now gradually normalizing, Mall vacancy rates in the top 7 cities will stabilize over the next two years, at 8.2 percent in 2025 and 8.5 pc in 2026. In 2021, the vacancy rate in these cities was as high as 15.5 pc.
The current retail boom is not limited to urban metros - Tier 2 and Tier 3 cities have emerged as the new consumption hotbeds, thanks to rising disposable incomes and deeper smartphone and internet penetration.
E-commerce adoption in these cities has outpaced that of Tier-1 cities - industry estimates peg the share of the overall online shopping pie at 65 percent.
The number of Indian online shoppers has jumped from 140 Mn in 2020 to nearly 260 Mn in 2024; it is projected to nearly double to 300 Mn by 2030, and to 700 Mn by 2035.
UNI PC BD