JLL report reveals a boost in fresh retail spaces across India, especially top seven cities

A new report by JLL highlights a significant increase in retail space supply across India, due to evolving consumer preferences and a thriving economy. It highlights the vibrancy of India's retail sector with an increase in supply of fresh retail spaces across the country. The report, ‘India Retail: Evolving to a new dawn’, indicates top seven cities viz Mumbai, Delhi NCR, Bengaluru, Hyderabad, Pune, Kolkata, Chennai are set to witness a substantial influx of new retail spaces. This growth is being driven by factors like, rising consumerism, increased institutional participation, and the strategic expansion of both domestic and international retail brands.

Top seven cities take the lead

Explosive growth: Top seven cities Mumbai, Delhi NCR, Bengaluru, Hyderabad, Pune, Kolkata, Chennai are projected to clock in 43 per cent rise in organized retail space by 2027, adding approximately 45 million sq ft through 88 new retail developments. This surpasses the supply witnessed in the past decade (2014-2023), which was around 38 million sq ft.

Shift towards larger centers: The average size of new retail developments is expected to increase by 30 per cent, from 391,099 sq ft to 507,341 sq ft. This indicates a growing preference for larger, experience-led retail centers.

Zonal distribution: North India is expected to lead the fresh supply with a 44 per cent share, followed by South India at 30 per cent. Notably, Tier II and III cities are also experiencing a sharp increase in retail development, with 25 million sq. ft. of new space expected by 2029.

Delhi NCR leads: Delhi NCR is expected to contribute the most to the upcoming mall supply with a 31 per cent share, followed by Chennai with 16 per cent and Hyderabad 14 per cent.

Table: Zonal distribution of upcoming retail spaces

Several factors are driving this retail growth. Experiential retail is one of them. As consumers are increasingly seeking unique shopping experiences, its driving developers to create larger, more engaging retail spaces. Another important catalyst is omnichannel retail strategy being adopted by brands. While online retail continues to grow, physical stores remain crucial for brand building and providing an immersive shopping experience. Moreover, both domestic and international brands are expanding their retail footprint in India, which is pushing up demand for fresh spaces. And ever increasing institutional investment in retail real estate highlights the sector's strong growth potential. In fact, growing confidence in India's retail sector led to institutional investment being almost 44 per cent (2.7 mn sq ft) of new supply in 2023.

Malls vs high streets

While the report doesn't explicitly break down the share of fresh retail space between malls and high streets, it highlights the growing dominance of malls, particularly in major cities. Malls offer a curated experience, a wider variety of brands, and amenities like parking and entertainment, making them attractive to both consumers and retailers. However, high streets continue to thrive in specific locations, offering a more localized and community-driven experience. The upcoming Lulu Mall in Lucknow is a prime example of this trend. Spread across 2.2 million sq. ft., it will be one of the largest malls in India, featuring a wide range of international and domestic brands, a multiplex, a family entertainment center, and a food court with diverse culinary options.

Table: Regional trends

JLL's report underscores the robust growth of India's retail sector. With increasing demand for experiential retail, strong institutional investment, and the entry of international brands, the future of retail in India is good. The ongoing development of larger, more sophisticated retail centers is poised to transform the shopping experience for consumers across the country.