Mall space to increase rapidly in 2018: JLL India
According to JLL India’s latest study, Indian retail supply is expected to grow to reach 19.4 million square feet (msf) by 2020 as demand will be at 15msf in the same time period.
JLL, one of India’s largest real estate service firms, has predicted that 2018 will witness the highest retail supply in India since 2011 and that existing malls will also undergo a period of rationalisation that will serve to prevent oversupply of retail space. In lieu of this, some malls are expected to close down as new ones are opened and many will also undergo renovation.
Ramesh Nair, JLL India’s CEO and Country Head, stated when discussing the report: “The retail sector of India is going through a fresh period of growth which is backed by strong economic fundamentals.”
Both Chennai and Hyderabad will see significant growth in retail space with Chennai expected to add 1.5mft of new malls and Hyderabad expected to add 2.2msf.
However, JLL has also predicted that 2018 will see a 13 percent decline year on year in new mall completions but that this will help to maintain market status quo.
During 2017, 28 malls were closed in India, totalling almost 5msf of retail space and this was concentrated around the Delhi NCR and Mumbai regions. These regions have the most malls and those that closed had been under-performing. Malls on the outer edges of Delhi and Mumbai are expected to house the next round of mall growth.
“Despite the onslaught of new retail formats like e-commerce, tele- marketing and others, we will continue to see a steady growth in brick and mortar form of retail,” said Nair. “The sector is pegged to grow to INR 1 trillion by 2020, at a CAGR [compound annual growth rate] of approximately 15 percent.”
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