India's retail sector is no longer limited to shops and markets. It is now taking a new turn-and is leading this change, India's top 7 metro city, where more than 16.6 million square feet of grade-a malls are going to be prepared between 2025 and 2026.
These figures are not a dream, but the latest report of Enarock Research. Hyderabad and Delhi-NCR have become the poster boy of this 'Mall Boom'. Together, the two are going to handle 65% of the total supply.
Demand Ran Gallop, But Supply Put A Break
In the last three years, the speed of leasing in the retail sector overtook all the estimates, but the construction work could not support that speed. In 2022, where developers were able to make only 2.6 million square feet of mall space, retail leasing reached 3.2 million. The difference increased in 2023 - the new supply stood at 5.3 million while leasing ran at 6.5 million.
Talking about 2024, the situation was even more interesting. Construction activities were almost stopped due to general elections and delays in government approval. A new mall space of just 1.1 million square feet came out throughout the year, while the demand remained continuously at 6.5 million square feet. It is a clear indication that the demand for organized retail space in India is on the boom, but the speed of construction still cannot catch it.
Foreign brands increased speed, retail blast in malls
India has become the dream destination of retail brands in the last few years. More than 60 international brands have now knocked in Indian malls- from fashion to food and gadgets to lifestyle.
The entry of these brands has cleared the way to bring the vacancy rate of the mall from 15.5% of 2021 to 8.2% in 2025.
Malls wave in small cities, online shopping changed picture
The matter of metro cities is different, but now Tier-2 and Tier-3 cities are also becoming part of this retail revolution. Rising income, internet grip and increasing use of e-commerce have made these cities a new retail hub.
In 2020, where there were 14 million online shoppers in India, now in 2024 this number has crossed 26 crores and by 2035 this figure is expected to reach 70 crores!
Real estate rocket made retail sector, investors are returning interest
All of this is not limited to malls only. This change is giving new energy to the entire real estate sector of India. Increasing activities in malls, interest of brands and increasing presence of consumers are now attracting investors and developers.
It can be said that the retail sector has now become a turbocharger of India's real estate engine - and the time to come can prove to be 'Golden Era' for this sector.
