16 September 2022, Mumbai:
The stock of Grade A shopping malls in the top seven cities of India is at 90 million sq ft.
The cities are Delhi, Mumbai, Pune, Bangalore, Kolkata, Chennai and Hyderabad. Over 50 per cent of the mall stock is in Delhi NCR and Mumbai.
Institutional investors and reputed developers are increasing their focus on Tier II and III cities. The retail sector in the country was under duress for a long time due to the pandemic. However, since March 2022, there has been an equally swift recovery owing to the favorable demographics, rapid urbanization, and rising consumption. All these factors have together created an environment that has boosted the confidence of the sector. With growth potential in the retail sector, investors expect healthy returns in the long run.
With the retail market rebounding on the back of strong leasing activity by international and national retailers, the vacancy in superior Grade A assets has been declining constantly. Investors prefer leased-based assets over strata-sold assets to ensure fair market rentals and timely returns. Investment in retail assets is not just limited to metros, as significant activities have been recorded in Tier II and Tier III cities as well. These cities are witnessing a considerable supply of quality retail assets by established developers.
