India's top eight cities to add 34 new shopping malls by 2020
With an expanding retail real estate arena, India is set to see 34 new shopping malls spring up by 2020. Covering a cumulative area of nearly 14 million square feet, the malls will be distributed across eight of India’s biggest cities.
The retail real estate market in India is going through a promising period of growth, according to consulting firm Cushman & Wakefield. Between January and September this year, there was an increase of 55% in the total area of retail space leased out in malls, bringing the overall figure up to 2.3 million square feet. Since last year, the total investment by private equity firms in malls is Rs. 7,959 crore.
The market is further due for growth on a large scale over the next few years. As elucidated by Anshul Jain, Country Head and Managing Director for Cushman and Wakefield, “With the estimated size of retail sector pegged at Rs 1 trillion by 2020, at an approximately 15% CAGR between 2016 and 2020, the scope for retail real estate remains high.”
Investors are therefore keen to capitalise on this market and maximise their returns. According to the real estate consulting firm, foreign retailers are entering the market in numbers, and they are searching for locations that have high footfall. As a result, as many as 34 new shopping malls may come up across eight cities in India by 2020, covering an area of 13.6 million square feet.
Amongst the cities, Hyderabad is expected to see the most development, with plans for 11 new malls. The malls will double the city’s existing mall coverage from 3 million square feet to 6 million square feet. This is followed by Delhi - NCR, with 8 malls, Bangalore with 6 malls, Chennai with 4 malls, Kolkata and Mumbai with 2 malls each, and Pune with 1 new mall.
The upward trend in retail investment is consistent with trends in India's broader consumer market. According to a report from consultancy BCG released earlier this year, the Indian consumer market is forecasted to increase to $4 trillion by 2025, with consumer spending in the country increasing by 40%.
