Malls come under focus at Shopping Centres Next 2023

The recently concluded two-event day Shopping Centres Next 2023 in Bengaluru, brought together retail industry experts and enthusiasts to share their observations on the growing shopping malls segment in India. 

The first day of the event brought forth insights into the evolving landscape of malls in India, highlighting their transformative role as hubs of community, technology, and growth.

As many as 24 new global brands have forayed in the last two years across Mumbai, Delhi NCR, Bengaluru, Hyderabad and Chennai. The operational retail stock as of H1 2023 stands at 89 million sq ft in Delhi NCR, Mumbai, Pune, Bengaluru, Kolkata, Chennai and Hyderabad together. As demonstrated in the discussions on day 1 at the event’s masterclass for shopping professionals, India has emerged as a coveted destination for global brands. Increased consumption, growing institutional participation, strategic collaborations with Indian retail chains, and a supportive regulatory environment have all contributed to India's allure.

Despite the growth in mobile and online commerce, physical stores continue to hold the ground in terms of offering experiential shopping and fostering social connections.

Speaking about the key to extracting value from shopping centres at the Masterclass, Rajendra Kalkar, President - Malls & Whole Time Director, the Phoenix Mills Ltd., said, “When you sell an asset, you realise the value instantly. For retail space players such as hotels, hospitals and upcoming annuity businesses like data centres or warehousing, there are twin benefits. One is the capital which can double, triple, etc. depending on the land prices in the location and various socio economic factors. The second benefit is annuity income (inflationary income). The moment one builds a good shopping centre, runs it well and ensures consumption, retailers can do fabulous business and make money from their turnover rent. There is an art to making this turnover rent income. Today, hardly 100 malls in India have been able to achieve this. There is enough potential for this.”

Citing the purchasing power and volume of purchasers in the country, he projected that with India beating China in GDP growth last year, this trend is set to grow at least for the next 10-15 years. “Also, the earning age of customers itself is a key factor to consider investing in shopping centres in India and reaping benefits from it,” he added.

Further elaborating on the need to make sure that the shopping centre becomes a part of the community and vice versa, it is important that investors plan to integrate social connections at the starting stage of mall design planning itself. “For Gen Z, shopping centres are where community building begins; that is the heart of their needs to meet, dine, socialise, refresh and spend time. There are ample ways to build on these needs such as organising health awareness programmes, wellness and fitness programmes, art projects, etc.”

Sharing his thoughts on the scope for retail real estate investments in Tier 2 and 3 cities in the country, Jayen Naik, COO, Nexus Malls, said, “There is enough consumption demand in Tier 2 and 3 cities, especially where we are present. Our mall in Bhubaneswar is among the best and as good as the other malls in the other metros. The median age of the population is 28-30 years. Which means, more than half the population will be consumers for tomorrow. Given the rising economy, large skilled population and disposable income growth, consumption is bound to grow. Good real estate can be built with the right amount of research and planning and we hope a lot more interesting spaces come up across all state capitals, smart cities and places regardless of tiers.”