16 new retail malls have opened in the top 8 cities since 2020: Report

Despite the epidemic, up to 16 new shopping centres totaling 15.5 million square feet of leasable space have opened in the last 30 months across eight major cities, according to Knight Frank.

In a webinar on Tuesday, real estate firm Knight Frank India unveiled its research titled "Think India, Think Retail 2022 Reinventing Indian Shopping Malls."

In December 2019 (before to the implementation of COVID), there were 255 malls spread across eight cities: Ahmedabad, Bengaluru, Chennai, Hyderabad, Kolkata, Mumbai, National Capital Region (NCR), and Pune, with a gross leasable area of 7.2 million square metres (77.4 million square feet).

According to Knight Frank, India has a total mall stock of 8.6 million square metres (92.9 million square feet), distributed among 271 operational malls in the top eight markets, by the conclusion of the first half of the 2022 calendar year.

Despite the pandemic's disruption, a new supply of 15.5 million square feet was added over the course of 30 months, according to the consultant. Currently, NCR comprises 34% of the entire mall stock, Mumbai contributes 18%, and Bengaluru contributes 17%.

"The retail real estate sector has reached a new level of maturity where smaller-sized and lower-grade developments are giving way to Grade A malls," said Shishir Baijal, Chairman & Managing Director at Knight Frank India. "He highlighted that the existing Grade A malls have over 95% occupancy which is indicative of the demand for quality real estate in this segment.

The quantity and quality of future projects will necessitate developers with expertise in shopping centre building and operations since more of them will seek to establish attractions given that retail malls are experiential.

He anticipated that, in the future, retail real estate would present excellent potential for investments, especially REITs (Real Estate Investment Trust).

Only 39% of all mall spaces in India, with a total gross lease area of 36 million square feet, are designated as Grade A malls, according to the survey. 52 malls in these top eight cities are all categorised as Grade A. These malls are well-positioned, with a great tenant mix, and active mall management.

According to a Knight Frank report, there are 94 malls in the Grade B category with a total gross leasing area of 29.1 million square feet. Grade C malls have a total leasing area of 27.8 million square feet, making up 30% of India's entire mall stock, which consists of 125 malls.

The expert also noted that there are now only 33 participants left in the community of mall developers that possess the necessary execution skills, credibility, and mall management experience. It claimed that more than 120 players were active in the retail real estate market prior to 2010.