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Bengaluru recorded 15.2 million square feet of gross leasable area in the first half of 2022, according to the latest report by Knight Frank India, a global property consultancy company. The gross leasable area of a commercial property is the area designated for the exclusive use of a tenant.
In Bengaluru, Grade B malls account for up to 50 per cent (7.6 million sq ft) of the total mall stock in the city. Grade A and C malls accounted for 42 percent (6.38 million sq ft) and 8 per cent (1.21 million sq ft) of the total mall stock, respectively.
“The existing Grade A malls have over 95 per cent occupancy, which is indicative of the demand for quality real estate in this segment. The scale and quality of development would require developers to specialize in shopping centre development and operations. Retail real estate will offer a great opportunity for investments, including REITs, in the future,” said Shishir Baijal, Chairman and Managing Director, Knight Frank India.
The total GLA across 271 operational malls in the top eight cities in India stood at 92.9 million sq ft in H1 2022. Of the top eight cities, NCR (31.7 mn sq ft) leads the chart with the highest GLA space, followed by Mumbai (16.1 mn sq ft).
Revenue projections
According to the report, between FY22 and FY28, organised retail sales volume is projected to grow at a constant annual growth rate (CAGR) of 17 per cent, reaching $136 billion in FY28. Factors such as organic consumption, growing consumerism, and improved economic momentum will contribute to the growth. Sales volume in India’s top eight cities increased at a CAGR of 24 percent and stood at $52 billion in FY 2022.
Ghost malls
In terms of vacancy, mall vacancy stood at 15.4 sq ft on a national scale. According to Knight Frank data, ghost malls (malls with more than 40 per cent of vacancy) occupy 8.4 million square feet spread across 57 malls in the country.
“To assess the true picture of mall health, we have identified all mall properties with a vacancy of more than 40 per cent as ‘ghost malls’. It is prudent to exclude ghost malls as this stock does not attract widespread retailer interest due to various constraints. Once these malls are removed from the stock, the overall mall health improves drastically in India,” said Vivek Rathi, Director of Research.
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