India to have 220 shopping malls by 2006

Wednesday, 14 April 2004, 19:30 IST
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NEW DELHI: India is likely to have over 220 shopping malls by 2006, up from 25 operational malls in 2003, as realtors rush to cash in on the booming retail business that is transforming the way Indians have shopped. The shopping mall phenomenon, however, is not likely to be restricted only to metros, with malls also coming up in non-metro cities and larger towns across the country. "Surely, malls have arrived in the Indian retail scenario," said Amitabh Taneja, director of the International Council of Shopping Centres and publisher of the retail industry magazine Images that has done a survey on growth of shopping malls in India. "Given the size of the market, many more retailers and investors will make their foray into the sector," he said. "Nearly a decade after the first signs of its evolution, India is expecting over 40 million square feet of quality retail real estate space by 2006." The total mall space in six A-Grade cities - Delhi (including Gurgaon and Noida), Mumbai, Bangalore, Hyderabad, Chennai and Kolkata - is expected to increase to over 21.1 million square feet by 2005. "Add to it the expected supply in seven non-metro cities - Pune, Ahmedabad, Lucknow, Ludhiana, Jaipur, Chandigarh and Indore - in the same duration, and the grand total comes to about 26.2 million square feet by 2005," said Taneja. He said most retailers were aggressively expanding operations in the large Delhi market, made all the more alluring by the upcoming suburban locations and their real estate advantage. According to Images, the national capital region will account for over 40 percent of the 26.2 million square feet of the total mall space expected to sprout in six metros and seven non-metros by 2005. While Gurgaon currently dominates the organised retail real estate segment in the city, the next two years will see localisation of the mall segment with all major parts of Delhi slated to have at least one major mall. Taneja said Mumbai, the financial capital of the country, was also expected to offer the second highest quantum of mall space with close to 4.8 million square feet scheduled to be operational by 2005-06. "It is not only the large cities, but also non-metros like Indore, Ludhiana, and Meerut that are witnessing a growth in mall development," said Taneja. "After a slow start in mall developments, Bangalore is also catching up and the next two years will witness the city crossing the two million square feet mark in the mall segment," he added. In the overall metro city pie, the share of Bangalore mall developments will increased from one percent in 2003 to 10 percent over the next two years. Out of the total 5.23 million square feet mall space being developed in the seven key non-metro cities by 2005, over 40 percent is coming up in Pune. Ahmedabad and Lucknow are expected to have over one million square feet of mall space by 2005. Cities like Jaipur, Chandigarh and Ludhiana are also attracting attention from developers and retailers. Taneja said the Indian market was still in the process of establishing parameters, classifications, and evolving a homegrown model of a mall. "Mall rentals are still high compared to developed markets. The concept of mall management is still alien to most," he said. "Though haphazard, most large markets have clearly passed the evolutionary stage and based on the initial success the first few malls received they have transcended smoothly into the acceleration stage." Terming the next two years as "critical" in the history of mall development in India, the magazine said the Indian consumer would eventually determine the way forward. "Once the novelty value wears off, it is expected that only malls with the right planning, tenant mix, positioning and management will prove to be good instruments," said Taneja. "Surely, the learning will establish the roadmap for further retail real estate developments in India."
Source: IANS