Retail Mall Boom in India: Growth, Rentals, and Consumer Trends
18 December 2023, Mumbai
Expansion Plans
ICRA reports, “India's top six cities are set for a mall space surge! Currently, at 105 million square feet, it's expected to reach 116–118 million by March 2025.
Delhi NCR leads the charge with 30% of new space, followed by Bengaluru (20%), Mumbai (17%), Pune (14%), Hyderabad (13%), and Chennai (6%)”.
Rental Revenue on the Rise
Expect mall operators to enjoy increasing rental income, projected to grow 9–10% in FY2024 and 8–9% in FY2025.
The key drivers are high occupancy rates, rising trading values, and rent escalations.
Footfall and Spending Uptickicra
Mall traffic and spending are rebounding strongly. ICRA reports an 8.4% YoY growth in rental income in H1 FY2024, indicating a robust recovery. Trading values are forecast to surge 14–15% in FY2024 and 10-12% in FY2025, thanks to premiumization and robust urban consumption.
Thriving Segments
Certain segments, like jewelry, electronics, premium apparel, beauty products, and entertainment, are witnessing higher consumption growth. This trend is expected to continue due to strong consumer demand.
Consumer Confidence Boost
India's private final consumption expenditure is rising, fueled by higher household spending. Optimistic consumer sentiment suggests this trend will persist, supporting mall retail sales.
Vacancy Puzzle Despite High Absorption
Despite a strong net absorption of 3.2 million square feet in H1 FY2024, vacancy levels increased slightly. This could be due to the timing of new mall openings or changes in tenant preferences.
This rewritten version summarizes the key takeaways of the original text and adds subtitles for improved readability and understanding.
5 Key Insights:
- Mall Boom: Square footage soars 15 million by 2025, Delhi leads expansion.
- Rents Rising: Operators see 9-10% growth, fueled by high occupancy & spending.
- Shoppers Return: Footfall and spending rebound, premium segments thrive.
- Confidence Boost: Rising household spending supports mall retail sales.
- Vacancy Puzzle: Slight vacancy increase despite strong absorption.
