India to add 45 mn sq. ft of retail space in 5 Years, surpassing last decade’s growth: JLL

This surge, expected between Q2 2024 and the end of 2028, will see the completion of 88 new retail developments across the country, significantly outpacing the supply of the past decade, which totaled around 38 million square feet.

This expansion will be concentrated in the top seven cities, which include Mumbai, Delhi NCR, Bengaluru, Hyderabad, Pune, Kolkata, and Chennai.

This wave of new retail space marks a shift towards larger, more experiential retail centres.

Modern shoppers’ evolving preferences for unique and engaging shopping experiences are driving this trend.

The average size of new retail developments is projected to increase by 30 per cent from the previous decade’s average of 391,099 square feet to 507,341 square feet in the upcoming period.

Dr Samantak Das, chief economist and head research & REIS, India, JLL, said, “Out of the 88 upcoming retail developments in the next five years, there will be 12 large-sized projects encompassing area of at least 1 million square feet each. These projects will contribute a substantial portion, amounting to 37 per cent of the total supply expected until 2028.”

He added, “This marks a notable increase in comparison to the previous decade, where retail centres of 1 million square feet and above accounted for just 27 per cent of completed supply. Furthermore, Delhi NCR will see two retail centres of over 2.5 million sq. ft each in the next 5 years.”

The growth in retail space is not just about size but also about quality and diversity.

The increasing global travel and exposure of Indian consumers have heightened their demand for immersive retail experiences.

Developers are responding by incorporating entertainment, leisure activities, and dining options into their projects, creating comprehensive destinations that cater to modern consumers’ desires.

78 per cent of the upcoming retail supply will be lease-based, allowing developers greater control over tenant mix and property management, thus commanding higher rentals.

He added, “Retail assets remain an attractive investment avenue for large foreign institutional investors, who are increasingly opting for greenfield and brownfield development platforms. Notably, 16 per cent (7.2 million sq. ft) of the new supply is owned by institutional players.”

As of the first quarter of 2024, India’s retail stock stood at approximately 89 million square feet.

According to the Real Estate Intelligence Service (REIS), JLL Research and Retail, an aspect of this upcoming supply is the size of the developments. It is anticipated that 37 per cent of the new retail space will consist of large-scale projects, each with a gross leasable area of 1 million square feet or more. Source: ANI