According to the data, around 15 new malls will enter the market in 2022, spread across 12 Tier 1, 2 and 3 cities. Chennai will see the highest supply this year – four new malls spread over an area of 2, 55 million square feet.
“As consumers return to more normal shopping and socializing habits and once again populate malls, India’s retail property market is responding to a significant improvement in footfall. Malls are once again experiencing high occupancy levels and the need for more organized retail spaces is pronounced,” said Pankaj Renjhen, COO of Anarock Retail.
Another 7.25 million square feet of retail space is expected to be operational in 2023.
Other Tier 1 cities that will benefit from a new supply of shopping malls include Ahmedabad, Bengaluru, Hyderabad, Mumbai, Pune and Ghaziabad in the NCR, encompassing an area of 5.1 million square feet. Tier 2 and 3 cities include Vadodara, Budaun, Indore, Nagpur and Udaipur with a total area of around 2.5 million square feet.
In 2020, the Covid-19 had had a severe impact on the economy, and the retail trade in particular. Physical retail stores in malls and high streets were hit hard, and a quick recovery seemed unlikely.
“During two severe waves that saw massive restrictions imposed on malls, operators had to rethink their business plans and strategies,” Renjhen said.
Given the high rental volumes by occupants of all categories and the dynamics seen in Tier 2 and 3 cities, mall developers are finishing their projects and adding new inventory quickly.
“In recent months, mall occupancy levels have returned to pre-pandemic highs across the country. New malls are popping up, and existing ones are looking for ways to expand, with consumer sentiment on the rise. and shopping malls that are experiencing an increase in footfall,” said Rohtas Goel, President,
Ltd, whose retail project in Chandni Chowk is in the final stages of construction.
Tier 2 and 3 cities are experiencing rapid mall penetration. Supply in these cities for the current year is nearly 2.5 million square feet, registering an annual growth of 91%.
These cities have seen tremendous growth in disposable income, mobile internet penetration and supporting infrastructure. Consumers in Tier 2 and 3 cities are now showing an apparent propensity for branded goods, paving the way for accelerated growth in organized retail across the country.
“While 2020 was a disastrous year with new mall supply of just 2.1 million square feet in Tier I cities, it nearly doubled to 4.01 million square feet in 2021,” said said Renjhen.
“The performance of most shopping centers in major consumer hubs either exceeded pre-pandemic levels in February 2020 or approached these thresholds,” he said.
The pandemic-driven e-commerce boom cannot be taken away. However, the upcoming supply of retail space – clearly in response to increased demand – proves that brick-and-mortar retail remains the dominant force in India.
Covid-19 has led to significant advancements, technological adaptation and a new wave of innovation in the retail industry as retailers respond to changing consumer needs. The result is omnichannel retail, which strikes a new balance between convenient and experiential shopping – and has also driven demand for offline premises.
