India requires 55 mn sq ft of Grade-A mall space by 2027

India’s retail sector is set for substantial expansion, with a demand for approximately 55 million square feet of Grade A mall space over the next four years, as highlighted in Cushman & Wakefield’s report Resurgent Retail: Powered by Rising Retail Consumption.

India’s retail sector is poised for significant growth as the country requires an estimated 55 million square feet of Grade A mall space over the next four years, according to a report by Cushman & Wakefield titled “Resurgent Retail: Powered by Rising Retail Consumption“. This report, unveiled at MAPIC India 2024 in Mumbai, highlights the need for faster development of quality retail spaces to align with other South Asian economies such as Indonesia, the Philippines, Thailand, and Vietnam based on Retail Space Per Capita (RSPC).

Despite increasing consumer demand, the pace of Grade A mall development in India has been sluggish, with an average of only 2.5 million square feet (msf) of new mall space added annually over the past eight years. A total of just 20 msf has been added in this period, and the first half of 2024 saw no new malls enter the market. Currently, India’s total Grade-A mall inventory stands at 61 msf across the top eight cities, with an RSPC of just 0.5 square feet per capita—far lower than smaller countries in the region. This underdevelopment is reflected in low vacancy rates in existing malls, which indicates pent-up demand for retail space.

To reach a 1.0 RSPC by 2027—a target comparable to Indonesia, given its similar per capita income projections—India needs to add 55 msf of Grade A retail space over the next four years. However, the current pipeline of projects adds up to just 18 msf through 2024-27, far short of the required pace. To bridge this gap, mall developers would need to deliver 9 to 11 msf annually, a rate that is 3.5 to 4.5 times the current capacity addition.

The report also highlights the increasing interest of international retailers in the Indian market, with the average number of global brands entering the country rising from 12 per year pre-COVID to 25 by 2024. This growing interest underscores India’s rising retail consumption and presents a unique opportunity for developers to cater to both domestic and global retail players.

As India’s per capita income approaches that of Indonesia, the next few years will be critical for expanding the country’s retail infrastructure, ensuring it capitalizes on the robust consumer demand and growing interest from international brands.