Good days ahead for retail as developers announce new mall projects
06 October 2021, Mumbai:
The Futures Expectations Index (FEI) of latest Consumer Confidence Survey turned positive this month as consumers once again stepped out to shop at malls and other stores. This encouraged retail developers to announce new mall projects.
As per Pankaj Renjhen, COO & Jt Managing Director, Anarock Retail, developers have announced around 4.5 million sq ft of new mall projects in 2021.
Most of new malls are likely to come up in Tier I and II cities across India. Tier I cities will house around 85 per cent of upcoming malls and account for 90 per cent of total mall space, adds Renjhen.
Noida to lead retail growth
The Anarock report states, Noida in NCR will have 1.1 million sq ft of new mall space in 2021, spread across three malls. The second biggest mall development will be witnessed in Bengaluru with 1.22 million sq ft space spread across two malls. Growth will be stirred by rising consumption patterns in the city and a boom in IT-ITES companies.
India’s financial and commercial capital, Mumbai will add around 1.1 million sq ft of new mall space next year, spread across three malls. Developers in the city are being cautious while announcing new projects as COVID has badly rampaged the lives and livelihoods of citizens.
Among the Tier II cities, Lucknow and Amravati will collectively add 4.7 lakh sq. ft. mall space in 2021. This will be spread across two malls.
Accelerated growth for organized retail
The organized retail sector in India is witnessing accelerated at 20-25 per cent CAGR per year. The sector is also witnessing a surge in new retail development, with many new projects being launched. For instance, in June 2021, Pheonix Mills announced a project to develop retail-led mixed-use assets in partnership with GIC.
The project will be developed with an investment of $733 million. Similarly, in March 2021, Blackstone acquired the retail and commercial assets of Prestige Group for $1.5 billion while Reliance Retail sold 10.09 per cent stake to investors such as Silver Lake Partners, KKR, ADIA during the pandemic. The sale enabled the company to raise Rs 47,265 crore in equity.
Mall development to double in 2021
Across India mall development is likely to double in 2021 compared to previous year, affirms Renjhen.
Growth will mainly be stirred by receding effects of the pandemic and rapid rate of India’s economic growth in FY22. Overall, Indian retail sector is likely to see good days ahead after being badly ravaged by COVID-19 pandemic last year.
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