The retail scene in India is set for a massive expansion, with approximately 41 million square feet of new retail spaces anticipated to emerge between 2024 and 2028 across the country's top seven cities. This includes projects in various stages of development, from construction to active planning. Delhi NCR is predicted to take the lion's share at 34%, trailed by Chennai at 20%, and Bengaluru and Hyderabad each at 15%.

International investors are heavily involved, with around 24% (9.7 million sq ft) of the upcoming supply already in their hands, ready to be unveiled over the next five years.

Steady economic growth has boosted consumer spending, prompting retailers to expand their presence and leading to numerous new mall announcements. In addition to the robust supply pipeline, developers are prioritizing larger malls to enhance the shopping experience.

Dr. Samantak Das, Chief Economist and Head of Research & REIS, India, at JLL, remarked, "Encouraged by India's buoyant economy, major real estate players are gearing up to launch retail projects. Institutional investors are playing a significant role in this surge. The existing operational retail space of 91 million sq ft is expected to grow by 45% to reach 132 million sq ft by 2028. With the introduction of India's inaugural retail-led REIT in 2023, we anticipate further acquisitions to expand the retail portfolio. Given the partnerships between global institutional funds and key developers, the retail sector is poised for accelerated growth."

Major Mall Openings in 2023

A total of 16 new retail developments, covering 6.2 million sq ft, were inaugurated in 2023, marking a 125% increase from the previous year. Notably, 44% (2.7 million sq ft) of this new space involved institutional funding. The average mall size in 2023 surged by 41%, from 276,800 sq ft in 2022 to 389,900 sq ft, as developers aim to provide enhanced experiences across entertainment, food, and fashion.

Rahul Arora, Head of Office Leasing Advisory and Retail Services, India, at JLL, stated, "Developers are focusing on larger malls to offer an enriched shopping environment, encompassing entertainment, food, and fashion."

Continued Expansion and Commitments

In 2023, a total of 8.7 million sq ft of retail space was leased across malls and key high streets in the top seven cities. Bengaluru led with a 33% share, followed by Delhi NCR (18%) and Mumbai (17%). The confidence of consumers is translating into retailer expansion strategies aimed at growing their store networks and sales.

Fashion and apparel accounted for the largest share of leasing volume at 40%, followed by super value and value fashion segments, which witnessed significant interest from leading retailers expanding their formats. Other noteworthy categories included food and beverage (16%), entertainment (13%), home furnishing (6%), and daily needs and grocery (5%).

A total of 14 new international brands entered the Indian market in 2023, up from 11 and 8 in 2022 and 2021, respectively. The majority of these brands (8) chose Mumbai for their first store openings, with the food and beverage segment leading the way in Delhi NCR.

This surge in retail development and expansion underscores India's growing importance as a key market for global brands and investors alike.