Commercial real estate players are looking to expand their footprint in the retail segment, driven by India’s increasing consumption and income levels.
The domestic consumption market in India is likely to rise considerably in the coming decade, supported by rising income levels and an increase in spending capacity, especially among the burgeoning young aspirational population, according to a joint study by the Confederation of Indian Industry and Knight Frank.
India’s real estate sector is set to reach $1.5 trillion by 2034, accounting for 10.5 per cent of the economy, according to the report.
As of 2023, organised retail consumption is estimated to be at 4.6 per cent of the total private consumption of individuals. However, by 2034, the share of retail consumption is estimated to grow to 21 per cent of the total private consumption.
This quantum of consumption boost will support the entry and expansion of retailers in India and give a fresh impetus to retail real estate — both for shopping malls and for high street.
For instance, DLF Retail is erecting a 2.7 million square feet (msf) mall in Gurugram. The company also plans to start a mall spanning 700,000 square feet (gross leasable area), along with a high street shopping plaza in Goa. These developments aim to elevate the local urban and commercial environments, enriching the region’s offerings.
“These endeavours reflect our confidence in the resilience and potential of the ever-growing retail sector in India, driven by the surge in footfall and sales across shopping malls. With upcoming operational milestones in Goa, Gurugram, and Delhi within the next 18 months, we are poised to deliver exceptional retail experiences and cater to the evolving needs of our ever-evolving consumers,” said Pushpa Bector, senior executive director, DLF Retail.
Bhumika Group, a retail real estate developer, plans to strengthen its presence with a Rs 250 crore investment in Faridabad’s Mathura Road micro market for high-street ventures.
The group’s flagship project, Urban Square Mall in Rajasthan, is set to expand with the introduction of an INOX-PVR multiplex, enhancing its offerings to patrons.
“The group’s expansion doesn’t stop there. Recent projects, such as the Metro Mall, have swiftly leased over 50 per cent of their space to prestigious retailers like Tata’s Zudio and Shoppers Stop, showcasing Bhumika Group’s mastery in selecting strategic locations and curating the perfect brand mix,” said Uddhav Poddar, managing director, Bhumika Group.
“As Bhumika Group pushes into Tier-I cities, its prospects for 2024-25 are exceptionally bright. The group is not merely expanding its footprint; it is revolutionising the retail landscape with cutting-edge solutions that promise to redefine industry standards, offering substantial gains for stakeholders and fuelling regional economic dynamism,” Poddar added.
In 2022, Inorbit Malls (India) secured a prime land parcel in Visakhapatnam, strategically positioned for development. Currently, construction is in progress for a 1.3 msf retail complex, slated for completion by early 2026. Additionally, expansion efforts are underway at the Vadodara mall, set to augment its space by 250,000 square feet. Additionally, as part of its expansion strategy, Inorbit is actively exploring opportunities in 18 cities, aiming to cultivate a pipeline of 4 msf across four/five projects within the next four/five years.
“We believe that in our country, there’s a lack of high-quality social spaces. We have charted our growth trajectory in a way that we can meet this latent demand while keeping consumer experience at the forefront. While 2023-24 (FY24) witnessed muted growth, we are bullish about this financial year and are expecting to grow 7-8 per cent over FY24,” said Rajneesh Mahajan, chief executive officer, Inorbit Malls (India).
IndiaLand has invested about Rs 200 crore in retail space, especially in the Grand Highstreet Mall of Hinjawadi, Pune. In the future, it plans to invest around Rs 140 crore in its upcoming project, the Cade Reality, located in Pune. The property will be a mix of residential, commercial, and retail projects.
“We intend to follow an aggressive expansion plan for the next four/five years… The growth prospect for the commercial real estate market is bright, especially as developers and businesses explore properties beyond Tier-I cities. By 2024-25, retail and commercial properties will witness a sharp rise in demand backed by economic growth, infrastructural development, and increased interest from foreign investors,” said Harish Fabiani, chairman of IndiaLand.