Easy land availability, cheap rates luring mall owners to smaller cities
27 June 2022, Mumbai:
Mall space in Tier II cities like Indore, Lucknow, Jaipur, Udaipur, Chandigarh and Mohalli is set to increase with retailers planning to open more stores in smaller cities amid rising demand. Many brands and retailers are shifting their stores to Tier II cities like Indore and Ahmedabad, says Rajendra Kumar, President-West, which operates more than half a dozen malls in Mumbai, Pune and Bengaluru, and in some Tier II cities.
New store openings across small cities are expected to soar 25 per cent Y-o-Y with leasing expected to increase past pre-COVID-19 levels this year, adds international property consultant CBRE.
Smaller cities drive retail growth
Tier-II, III cities are driving the growth of malls in the country, affirms Shibu Philips, Director-Shopping Malls, Lulu Group India. Lulu is entering the northern retail market by expanding to smaller cities like Varanasi, Varanasi, Prayagraj and Ahmedabad in near future. Developers such as Phoenix, Bhumika, Trehan Iris, Sushma and Unity also plan to open malls in these cities.
A substantial population continues to work from home and they continue to shop, leading to increase in consumption, explains Prateek Mittal, Executive Director, Sushma Group which plans to deliver 150,000 sq ft of its 350,000 sq ft project in Chandigarh’s Zirakpur and expand its retail presence.
Easing pandemic boosts retail expansion
Retail growth in Tier II, III cities is being driven by the willingness of youth to spend and experiment in entrepreneurship, remarks Jatin Goel, Director, Omaxe Ltd which has seen leasing activity grow in Faridabad, Lucknow, New Chandigarh, Amritsar and Patiala.
Easing of the pandemic is encouraging retailers to roll out store expansion plans. Delhi-based Bhumika group is constructing a 350,000 sq ft retail space in Udaipur mall that will become operational in August. In addition, the group will build a mall in Alwar and is exploring tie-ups in Jaipur Jodhpur, Kota, Bikaner, Ajmer and Delhi-NCR (National Capital Region), says Uddhav Poddar, Managing Director, Bhumika Group.
Easy land availability at cheap rates, increasing prices and future prospects are luring big retail chains and malls to small cities of India, affirms Ashish Narain Agarwal, CEO, PropertyPistol.com, a brokerage firm.
