The slowdown in the Indian real estate sector has surprisingly not hampered the development of new malls across India.
The 7 metros have 190 operational malls even as more than 60 opened across India in the past 1 year alone, data from Bangalore based Asipac Consulting says. And it is not just the number of malls that has more than doubled since 2008- the average area of the top 15 malls across the country has gone up 40 % (from 6.17 lakh square feet to 8.66 lakh square feet) in the past 3 years.
Developers like the Rahejas (Inorbit), Phoenix (Market City), DLF Ltd and Prestige ( Forum) are now building larger malls as these have a better chance of succeeding in an overcrowded marketplace, the report from Asipac says.
Industry experts say consumers prefer bigger malls which offer more brands under one roof rather than visiting multiple malls, mirroring what happened in the mature retail markets years ago.With easing of the FDI (Foriegn Direct Investment) policy, international retailers coming to India are expected to occupy larger spaces thereby increasing revenues. "If the anchor tenants occupy larger spaces, it would benefit retailers as well as the consumer, who can expect prices to come down by 10 to 15 % in these large-format stores.
As a consequence, the revenue of the mall would definitely go up," says Ms. Pushpa Bector, Senior VP, Head (Leasing & Mall Management), DLF Mall of India, which opens early next year in Noida. The mall, spread across 19 lac square feet, will have 14 anchor tenants, including brands such as Uniqlo which will make its debut in India.
A dipstick done by Asipac shows about 40 % of the malls in the country are performing well. Of the ones doing well, most grew by nearly 16 % last year and 12 % in financial year 2013 - not bad considering the overall macro situation in India. Bigger malls may not succeed immediately. But, they eventually pull in people because of the mix of brands that they offer, says Mr. Amit Bagaria, Founder, Asipac group.
Over the next 3 years, the average area of the top 15 malls is projected to go over 10.3 lakh square feet, based on ongoing construction, the report says, indicating the preference for building larger shopping complexes. The average daily footfall in Phoenix Marketcity, the largest mall in terms of size, is 65,789 compared to 90,803 for GIP, Noida, ranked 7th on the list.
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