Organised retail sales volume in India’s top-8 cities is estimated to grow at a compounded annual growth rate (CAGR) of 17% in the coming 6 years. According to a report by Knight Frank India, these numbers will touch $136 billion by FY 2028 as against $52 billion in FY2022.
The report, titled ‘Think India, Think Retail 2022 – Reinventing Indian shopping malls’ points out that in the same period, potential retail sales in Indian malls are estimated to grow at a CAGR of 29% in the FY 2022 – 28 period, reaching $39 billion by FY28.
Retail sales in Indian malls across the top-8 cities grew at a CAGR of approximately 3% to reach $8 billion in FY22 while in FY23, the potential consumption is estimated to surpass the pre-COVID levels to reach $11 billion. The organised retail sales volume will grow at an expected CAGR of 24% between FY17 and FY22, maintaining a healthy rate of growth despite the pandemic-induced slowdown.
“The retail sector has reached a new level of maturity, where smaller sized and lower grade developments are giving way to Grade-A malls. The existing Grade-A malls have over 95% occupancy, which is indicative of the demand for quality real estate in this segment. Given that retail malls are experiential, more of the future developments will want to create destinations. Therefore, the scale and the quality of development would require developers to specialise in shopping centre development and operations. Like the office segment, post consolidation, retail real estate, too, will offer great opportunity for investments, including REITs in the future,” said Shishir Baijal, CMD, Knight Frank India.
When it comes to space take-ups in malls in H1 2022, apparel and accessories are the two categories that have expanded their footprints. Beauty, footwear and entertainment categories also registered a marginal growth in category split during the same period.
The eastern and the northern region witnessed a strong recovery in consumption reaching new heights by crossing pre-pandemic levels in March 2022. The eastern region registered a significant increase in index value from 100 (as a base index as of March 2019) to an index value of 123 at the end of March 2022. The consumption index in the northern region increased to 118 during the same period.
The southern region registered a steady improvement in recovery crossing pre-pandemic levels registering an index value of 108 whereas the western region took the worst hit due to tighter restrictions and consumption was marginally less than pre-pandemic levels (index value of 99) at the end of March 2022.
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