With the worst effect of the Covid pandemic having subsided, restored customer sentiment, intake hunger, and omnichannel adoption by brands and retailers are anticipated to sustain development in the retail sector.
Shopping mall designers, too, are positive due to the fact that of this bright outlook.According to the Retailers Association of India (RAI), the retail market size is expected to touch $2 trillion by 2032.
Exceeding the pre-pandemic levels, retail sales grew around 19 percent in 2022.
Increased retail demandBuoyed by this growth, developers plan to add almost 25 million square feet of brand-new shopping center space throughout the leading 7 cities over the next 4-5 years; NCR and Hyderabad represent almost 46 per cent of overall new upcoming supply, carefully followed by Bengaluru at 19 per cent, according to the report.Kumar Rajagopalan, CEO, RAI, stated: Currently, the top cities have over 51 million square feet of shopping mall stock throughout the nation, with NCR, MMR (Mumbai Metropolitan Region), and Bengaluru accounting for 62 per cent of overall stock.
Also, costs by high-end brands in tier-II cities has increased over 50 per cent compared to the pre-pandemic period.
The schedule of big land parcels and lower leasings vis--vis bigger cities has actually been instrumental in attracting numerous brands, the report mentioned.Purchasers altered behaviour and interest in tier-II and tier-III centres for an experience where shopping is clubbed with leisure and home entertainment has pressed shopping center designers and brands to consolidate their presence in these untapped markets.
Tier-II and III cities also gained prominence due to the opening up of work centres in these cities, said Anuj Kejriwal, CEO - & MD, ANAROCK Retail.Rising rentalsOwing to increased consumer costs power, demand for retail leasing has actually increased.
This has caused a surge in average rentals, too.
A market analysis reveals that rents at high-street locations in the countrys leading 8 cities rose up to 50 percent in 2022, while going shopping malls saw a 10 per cent YoY typical rent increase, stated Aman Trehan, executive director, Trehan Iris.The Anarock-RAI report discussed that there has been a rise in mall leas by nearly 15 per cent, which is higher than the pre-pandemic levels.
Bengaluru registered the biggest uptick, around 27 percent.The percentage modification is not much because rentals came down significantly during the Covid period, they are still 20 per cent more than the pre-COVID times, Kunil stated.Developers believe that balance rentals are anticipated to increase further by around 15 per cent in the next six months as more retail brands seek to establish a presence in prime locations.Online vs offline retailAccording to industry estimates, the online retail market in India is around 25 per cent of the total organised retail market and it is likely account for around 37 per cent by 2030.
Despite the rising penetration of online retail, it holds a little portion of the overall organization.After the pandemic, despite the facility of e-commerce channels, offline retail space did not deal with any major setbacks as a high degree of combination of physical and digital took place, stated market experts.Trehan stated e-commerce has not affected offline retail as India is majorly an offline retail market and merchants are adjusting to the changing market characteristics and shifting to an omnichannel environment where customers can shop through a variety of online and offline channels.
Thus, its a win-win situation for us, he said.