Retail

Indian retail sector needs 55 mn sq ft grade-A mall space over 4 yrs

24 Sep '24

2 min read

Indian retail sector needs 55 mn sq ft grade-A mall space over 4 yrs

Pic: Cushman & Wakefield

Insights

With India's total grade-A mall inventory standing at 61 million sq ft across top eight cities, the country's retail sector needs 55 million sq ft of grade-A mall space over four years to keep pace with the market, according to a report by Cushman & Wakefield.
Low mall penetration is the reason why vacancies in existing grade-A malls are at its lowest level across top real estate markets.

With India’s total grade-A mall inventory standing now at 61 million sq ft across top eight cities—a mere 0.5 sq ft of retail space per capita that is much lower than those of smaller countries like Indonesia, the Philippines and Vietnam—the country’s retail sector needs 55 million sq ft of grade-A mall space over the next four years to keep pace with the market, according to a recent report.

The report by global commercial real estate services firm Cushman & Wakefield, titled ‘Indian Retail: Ready for Take-Off’, noted that the first half this year saw no new mall supply enter the market.

The retail sector in India saw an average of a mere 2.5 million sq ft of grade-A mall developments commence operations over the last eight years.

This implies 20 million sq ft of grade-A malls got added in the last eight years despite consumer demand consistently growing stronger. This low mall penetration is the reason why vacancies in existing grade-A malls are at its lowest level across top real estate markets, the report noted.

The projected pipeline of grade-A retail mall projects in India add up to merely 18 million sq ft in the 2024-27 period

The average number of global brands entering India has surged from a pre-COVID yearly average of 12 to 25 this year, the report said, offering an opportunity for Indian mall developers to deliver this quantity in approximately four to five years.

This will be around 9-11 million sq ft per annum—nearly 3.5-4.5 times the capacity addition seen over the last eight years.

Fibre2Fashion News Desk (DS)

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