New supply of retail real estate space is expected to rise 43 per cent across seven major cities by 2027 as developers are expanding their business amid strong revival post COVID pandemic, according to JLL India.
Real estate consultant JLL India on Monday released its report 'India Retail: Evolving to a new dawn' that highlighted the operational retail real estate space in shopping malls stood at 89 million square feet.
The operational retail stock as of H1 2023 in the top seven cities (Delhi-NCR, Mumbai, Pune, Bengaluru, Kolkata, Chennai, and Hyderabad) stands at 89 million square feet as of June-end this year.
Out of the total retail stocks in malls, Delhi NCR has the maximum 28 million square feet, followed by Mumbai with 17 million square feet and Bengaluru 14 million square feet.
"The physical retail space segment has an expected supply pipeline of over 38 million sq ft of retail developments between H2 2023 and 2027, across the top seven cities," JLL said.
Out of the 38 million square feet new retail supply in malls estimated by 2027, Delhi-NCR will have 11.6 million square feet area, accounting for 31 per cent of the expected supply.
Bengaluru will witness new supply of 4.97 million square feet by 2027, Chennai 6.23 million square feet, Hyderabad 5.48 million square feet, Kolkata 2.94 million square feet, Mumbai 4.5 million square feet and Pune 2.32 million square feet.
Gross leasing of retail space in shopping malls as well as leading high street locations across the top seven cities stood at 3.16 million square feet in H1 2023.
"India's retail sector is on an elevated growth curve where the focus is on creating an innovative built environment, greater connections with the consumers, and curating physical storefronts in untapped regions of the country including tier II and III cities, said Rahul Arora, Head of Office Leasing Advisory and Retail Services, India, JLL.
Commenting on the report, Gaurs Group CMD Manoj Gaur said, "Following massive residential development, the retail spaces are now experiencing high tailwinds. The main factors driving this trend are favourable global perception, high growth opportunities, rapid economic progress and optimistic investors' sentiments."
Gurugram-based realty firm Ocus Group CEO Vinod Rajpaul said, "Organised retail is on the high. There has been a substantial increase in the footfalls in malls, particularly post Covid-19 pandemic. The demand for quality retail spaces is surpassing supply across major cities."
The strong demand has also meant hardening of lease rentals as well, he added.
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