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Monday, July 15, 2024

The Rise of Mint Primer: Developers’ Shift Towards Offline Retail.

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In Short:

Many malls are closing due to online shopping popularity, but developers are optimistic about new retail spaces. Approximately 45 million sq. ft of retail space will be added by 2028. Developers are encouraged by successful Grade A malls and are focusing on larger, experience-led projects. However, there are underperforming malls with high vacancy rates, known as ‘ghost shopping centers’. The Delhi-NCR region will see the most new retail space.

Developers Bullish on Retail Spaces Despite Mall Closures

We all love the convenience of shopping online, but what happens to all those malls we used to frequent? Well, many of them have sadly closed down. However, there’s still hope for the future of retail spaces, as revealed in the latest numbers from JLL India, a property advisory firm. Let’s delve into why developers remain optimistic about the retail sector.

Expected Surge in Supply

The organized retail space is set to see a significant surge, with nearly 45 million sq. ft expected to be added between 2024 and 2028 in the top seven cities. This growth will come from 88 new retail developments, including shopping malls and large retail-led projects. The upcoming projects will not only surpass the supply from the past decade but will also feature larger retail spaces to cater to consumers’ evolving needs.

Developer Optimism

Despite the closure of many malls, grade A malls have continued to perform well, maintaining good occupancy levels and footfall. In fact, developers such as Phoenix Mills, DLF, Prestige Group, and Lulu Group are looking to expand their portfolios and launch new shopping malls. Foreign institutional investors are also showing interest in retail assets, making them an attractive investment avenue.

Locations for Future Development

The Delhi-National Capital Region (NCR) is expected to see the largest share of new retail space in the coming years, followed by Hyderabad and Chennai. The surge in retail development in Delhi-NCR is aimed at catering to a diverse consumer base in the region.

Challenges Ahead

While there is optimism for new retail projects, there are also challenges. There is a growing number of underperforming malls with high vacancy rates, termed as ‘ghost shopping centers’. These underperforming assets pose a challenge for developers looking to revitalize retail spaces.

Trends in Retail Development

With the rise of online shopping, offline retail spaces are evolving to offer more than just shopping. Future malls are expected to focus on experience-led retail, offering a wide range of services including entertainment, food, and social activities. Some malls may even include auditoriums and fulfillment centers to enhance the overall shopping experience.

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