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International property consultancy firm Cushman & Wakefield estimates that India will see close to 34 new malls by 2020 in the top eight (Ahmedabad, Bengaluru, Chennai, Delhi-NCR, Hyderaqbad, Kolkata, Mumbai and Pune) Indian cities.
Hyderabad with 11 new malls will see the highest construction by 2020 while Delhi-NCR and Bengaluru are likely to add eight and six new malls respectively. At about 13.6 million square feet (msf), the new supply will add about 20 per cent to the available mall inventory in these cities.
Rise in demand The retail sector has been encouraged by an upward trend in mall space leasing, which was up by 55 per cent during January–September 2017, recorded at 2.3 msf. New supply for the same period saw a year–on–year (y-o-y) decline of 63 per cent at 1.9 msf.
Anshul Jain, Country Head & Managing Director, India, Cushman & Wakefield, said, “There is now a regained confidence among developers to pay heed to this sector as investors show greater commitment towards it. An estimated ₹79.59 billion has been invested by private equity funds in malls between January 2016–September 2017.”
“Now after a prolonged period, slow growth, the retail sector has regained momentum and its trust in traditional brick and mortar retail space acknowledging the role that will play in the future growth of the sector. Increasingly it is understood that retail malls will continue to hold importance as a ‘destination’ going beyond stores and selling. Consequently, even e-commerce companies are establishing a physical presence through ‘experience’ stores in many malls and on prominent high streets,” he added.
Hyderabad boom Hyderabad will more than double its current mall inventory of under 3 msf to over 6 msf by 2020. The new malls will be spread across the city in areas of Madhapur, Gachibowli, Panjagutta, Begumpet, and Uppal amongst others.
Delhi NCR and Bengaluru will contribute about 4 msf and 3 msf of additional mall spaces respectively. The only city that is not expected to see any change in their current mall scenario will be Ahmedabad where, as of now, there are no new announced projects for malls. Ahmedabad has remained a largely high street mall due to customer preference to remain at their traditional locations for retail activities.
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