 "Malls registered high demand this year, trend likely to continue in 2024")
As retail real estate demand continues to grow, more than five million square feet (msf) of grade A malls opened in 2023, which is the highest in seven years, The Economic Times (ET) reported. Industry experts said that another eight million square feet of malls will become operational in 2024.
Malls in the country are likely to attract investments upwards of Rs 20,000 crore in the next 3-4 years. Major mall developers, DLF, Prestige, and Phoenix have already started the next phase of expansion as top retailers are looking to expand their store count across the country. Saurabh Shatdal, an industry insider, told ET that retail real estate has registered increased traction, largely driven by consumption-led growth in the Indian economy.
Listed retail players expanding their footprint
Reliance Retail, PVR, Aditya Birla Fashion, and Tata Trent have increased their store count this calendar year which is in line with the rise in their revenues. Shatdal said that landowners who have quality retail assets with healthy financial conditions can extract impressive gains from this bullish trend by expanding into tier-I or tier-II and tier-III cities.
Since the Covid-19 restrictions were lifted, the physical shopping trend has continued to rise. This has resulted in mall operators moving towards expansion, with confidence, said another expert. No retailer wants to be left behind in this expansion as they have prepared plans to open new stores in tier-2 markets.
Healthy occupancy rates in 2023
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Most malls that opened this year had commitments even before they became operational, and were occupied soon after their opening. These include Palladium in Ahmedabad, Pacific Premium in Delhi NCR, Lulu Manjeera in Hyderabad, Mall of Millenium in Pune, and Mall of Asia in Bengaluru, the ET report said. These malls have occupancy rates of more than 90 per cent.
The rental income for mall operators is also expected to grow by 9-10 per cent in the financial year 2023-24 (FY24) and by 8-9 per cent in FY25, according to an ET report which cited data from Icra.