Chennai: Despite rapid growth of e-commerce in the country, India is expected to get over 65 million sq ft of new mall space by 2022, with the top seven metro cities likely to house 72 per cent of this space, said a report.
According to property consultant Anarock, Mumbai Metropolitan Region (MMR), Delhi-NCR, Hyderabad and Bengaluru would see the highest supply of mall space, while tier II and tier III cities are to see 18.2 million sq ft of new supply.
It said region-wise, space for new malls in West India tops out at 25 million sq ft, followed by South India at 21.7 million sq ft, North India at 11.9 million sq ft and East India at 6.4 million sq ft in its new report, titled ‘TCCx: Redefining the Future of Retail Malls’.
Cities like Ahmedabad, Amritsar, Baroda, Bhubaneshwar, Chandigarh, Cuttack, Dehradun, Goa, among others, will witness retail growth, said the report.
The retail sector will witness new trends in fund-raising, including increased platform-level deals and retail real estate investment trusts (REITs), it said and added that REITs can be a viable tool for mall developers to raise funds. Also, the retail REIT structure and performance may not be directly comparable with the commercial office sector, it stated.
The Indian retail industry has moved from long-term leasing to short-term leasing tenures (three to five years) to enable constant updating of the brand mix within the mall. Globally, the standard lease term is still above five years, said the report.
“Of the 65 million sq ft of new mall supply hitting the Indian market by 2022-end, nearly two-thirds (40 million sq ft) will deploy by 2020-end itself – and not just in the metros. This new supply is also driven by the increasing interest of institutional investors – including private equity players – who invested almost $1.9 billion into Indian retail between 2015 and Q1 2019,” said MD and CEO, Anarock Retail, Anuj Kejriwal.
Over 60 per cent of this investment corpus was infused in the last two years (2017 and 2018) alone, making these the best years for the retail sector in recent times, he added.