India’s retail mall space is set to rise to 95 million square feet (msf) by 2021 from 75 msf now in the top 7 cities of the country with NCR, Hyderabad and Bengaluru leading the supply, according to a report by Reed Exhibitions India titled 'Malls of India'.
The ninth edition of the report, which was released recently, shows significant supply being expected in tier-2 and tier-3 cities, driven by increasing urbanization, infrastructure investment and increased consumer spending.
The report said that India was poised to become the third largest consumer market, with consumer spending growing to $ 6 trillion (Rs 421 trillion roughly) by 2030 from $ 1.5 trillion (approximately Rs 105 trillion) at present. This consumption would be shaped by 90 million new millennial led households and nearly 370 million Gen-Z consumers
In his presentation during release of the report, Ashutosh Limaye, Director and Head , ANAROCK Consulting Services said that on a pan-India basis, India’s retail space was set to rise to 120 msf over the next 3 years from 100 million square feet now in Grade A mall space.
According to Limaye, within three years, 20 million sq ft of Grade A mall space will get built in India, even as over 50 malls have either shut down or downgraded into mix use centres in recent times. The growth is likely to come on the back of organised retail which is set to double from nine per cent to 18 per cent and online retail from three per cent to seven per cent in the next four years.
Among these, Chandigarh has led private equity (PE) investments for malls in India, attracting roughly Rs 1101 crore from 2015 till year-to-date (YTD), as per Venture Intelligence. This is followed by Mumbai, Hyderabad and Bangalore which have seen PE investments in malls worth Rs 1052 crore, Rs 1017 crore and Rs 772 crore for the said period, respectively.
Venture Intelligence data shows that the country saw total PE deals in malls worth roughly Rs 1467 crore in 2016, which went up to Rs 2299 crore approximately in 2017.
Limaye stated that big investments into retail realty include Blackstone's deals with L&T Realty, Alpha G Corp, and Carnival, and GIC's deal with Sheth Developers.
Meanwhile, according to the Reed Exhibitions report on malls, India’s retail real estate sector is witnessing growing investments by leading PE funds and institutional investors at the back of growing consumer demand, stable economic and political environment and quality retail real estate development.
To fuel this development, some of the key investors including Blackstone, Canada Pension Plan Investment Board, GIC Private Ltd and the Xander Group are actively pursuing investment opportunities.