India’s leading urban hubs are short of new shopping malls, leading to the expectation that over 16.6 million square feet of Grade-A mall space in Tier-I cities could be added during this and the next calendar year, property services consultant ANAROCK has said. Hyderabad and Delhi-NCR would account for a significant 65 percent share of this fresh supply as the consumption trend is expected to surge.
ANAROCK also said that with the demand-supply imbalance of previous years now gradually normalizing, mall vacancy rates in top seven cities will stabilize over the next two years at present level of 8.2 percent. In 2021, the vacancy rate in these cities was as high as 15.5 percent.
Top seven cities of India include Delhi-NCR, Mumbai Metropolitan Region (MMR), Bengaluru, Hyderabad, Chennai, Kolkata and Pune.
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Anuj Kejriwal, CEO and MD, ANAROCK Retail said the surge is also prompted by a perceivable shortfall in new supply of Grade-A malls across India.
“The previous three-year data trends show that new mall supply in the top 7 cities did not match the overall leasing. In 2022, these cities witnessed approximately 2.6 msf of new Grade A retail supply, while leasing clocked in at around 3.2 msf. Likewise, 2023 saw 5.3 msf of new Grade A mall supply, while 6.5 msf were leased. New Grade A mall supply in 20204 was just 1.1 msf, while leasing was 6.5 msf," he said.
Kejriwal added that the demand-supply gap widened in 2024 due to approvals slowing down because of general and state elections.
The ANAROCK report, released on May 13, said both mall developers and retailers are showing resolute confidence, spurred by strong leasing and positive consumer sentiments.
"The strong leasing rate is also prompted by the entry of over 60 international retail brands in India over the last four years across categories like fashion, electronics, lifestyle, and F&B. This has accelerated demand for high-grade organized retail spaces, particularly in high-footfall zones like malls and high streets," he said.
Aman Sharma, Managing Director and Founder of Aarize Group said that the infusion of 16.6 million sq. ft. of Grade A mall space across major urban centers reflects the resilience and resurgence of India’s organized retail segment.
“With Hyderabad and Delhi-NCR accounting for nearly 65 percent of the upcoming supply, these markets are poised to become epicenters of next-generation retail experiences. This expansion is backed by strong consumer demand and a growing appetite from global and domestic brands,” he said.
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