Hyderabad has highest concentration of Grade A mall stock: Knight Frank India
Grade A malls constitute 52% of the total gross leasable area in the city
Hyderabad, 13th September 2022: Knight Frank India, the leading international property consultant in the country, in its latest report ‘Think India, Think Retail 2022 – Reinventing Indian Shopping Malls’ cited that Hyderabad recorded 7.2 mn sq ft of gross leasable area (GLA) as of H1 2022 comprising a share of 7.7% of the country’s (top eight Indian cities) total mall stock with 52% of the city’s mall classified as Grade A. Hyderabad has the highest share of Grade A mall stock in the country. Gross leasable area across 217 operational malls in top 8 cities in India stood at 92.9 mn sq ft as of H1 2022. A significant growth from 77.4 mn sq ft of gross leasable area registered until Dec 2019 across 255 malls in India.
Grade-wise mall stock distribution in Hyderabad, Grade A malls comprised a maximum share of 52% of the total stock in the city with 3.9 mn sq ft as of H1 2022. This is the highest percentage share of Grade A leasable area for a city across the top eight markets of India. The share of Grade B and C malls stood at 21% (1.57 mn sq ft) and 27% (2.02 mn sq ft) respectively.
As per the grade-wise mall stock distribution in top eight cities in India: Grade A malls contributed 39% of the total stock with 36 mn sq ft in H1 2022. High occupancy, strong tenant mix, good positioning and active mall management being the key driving factors. Grade B mall stock, with decent occupancy and tenant mix, contributed 31% with 29.1 mn sq ft. Grade C malls contributed the lowest 30% (nearly 27.8 mn sq ft) during the same period. High vacancy rates, poor tenant mix, and relatively poor mall management impacted the contribution by Grade C malls. Of the total number of 271 operational malls in India, Grade A comprised of 52 malls accounting to 19%. Grade B and C comprised of 35% (94 malls) and 46% (125 malls) respectively.
GROSS LEASABLE AREA & GRADE WISE DETAILS OF THE 271 MALLS ACROSS TOP 8 CITIES IN INDIA
Sharing an overview on the ‘Mall Culture’ in India, Shishir Baijal, Chairman & Managing Director at Knight Frank India said, “The retail real estate sector has reached a new level of maturity where smaller sized and lower grade developments are giving way to Grade A malls. The existing Grade A malls have over 95% occupancy which is indicative of the demand for quality real estate in this segment. Given that retail malls are experiential, more of the future developments will want to create destinations. Therefore, scale and quality of development would require developers to specialise in shopping centre development and operations. Like the office segment, post consolidation, retail real estate too will offer great opportunity for investments including REITs in the future.”
Outlook on Organized Retail Sales Volume and Consumption in Shopping Malls in India
As per the report, between FY 2017-2022, sales volume in the organised retail sector grew at a CAGR of 24% reaching USD 52bn across top 8 cities in India. Furthermore, in the next five years between FY 2023 – 2028 organised retail sales volume is projected to grow at a CAGR of 17% reaching USD 136 bn.
Between FY 2017 – 2022, consumption in shopping malls across top 8 cities in India grew at a CAGR of 3% and stood at USD 8 bn in FY 2022.In FY 2023, the potential consumption is estimated to cross the pre COVID-19 levels reaching USD 11 bn. In the long term, the potential consumption in Indian malls is forecasted to grow at a CAGR of 29% in between FY 2022 – 2028 and is estimated to be at USD 39 bn in FY 2028.
About Knight Frank
Knight Frank LLP is a leading independent, global property consultancy. Headquartered in London, Knight Frank has more than 16,000 people operating from over 384 offices across 51 markets. The Group advises clients ranging from individual owners and buyers to major developers, investors and corporate tenants. For further information about the Company, please visit www.knightfrank.com.
Knight Frank India is headquartered in Mumbai and has more than 1,400 experts across Bangalore, Delhi, Pune, Hyderabad, Chennai, Kolkata, and Ahmedabad. Backed by strong research and analytics, our experts offer a comprehensive range of real estate services across advisory, valuation and consulting, transactions (residential, commercial, retail, hospitality, land & capitals), facilities management and project management.
Hyderabad, 13th September 2022: Knight Frank India, the leading international property consultant in the country, in its latest report ‘Think India, Think Retail 2022 – Reinventing Indian Shopping Malls’ cited that Hyderabad recorded 7.2 mn sq ft of gross leasable area (GLA) as of H1 2022 comprising a share of 7.7% of the country’s (top eight Indian cities) total mall stock with 52% of the city’s mall classified as Grade A. Hyderabad has the highest share of Grade A mall stock in the country. Gross leasable area across 217 operational malls in top 8 cities in India stood at 92.9 mn sq ft as of H1 2022. A significant growth from 77.4 mn sq ft of gross leasable area registered until Dec 2019 across 255 malls in India.
Grade-wise mall stock distribution in Hyderabad, Grade A malls comprised a maximum share of 52% of the total stock in the city with 3.9 mn sq ft as of H1 2022. This is the highest percentage share of Grade A leasable area for a city across the top eight markets of India. The share of Grade B and C malls stood at 21% (1.57 mn sq ft) and 27% (2.02 mn sq ft) respectively.
As per the grade-wise mall stock distribution in top eight cities in India: Grade A malls contributed 39% of the total stock with 36 mn sq ft in H1 2022. High occupancy, strong tenant mix, good positioning and active mall management being the key driving factors. Grade B mall stock, with decent occupancy and tenant mix, contributed 31% with 29.1 mn sq ft. Grade C malls contributed the lowest 30% (nearly 27.8 mn sq ft) during the same period. High vacancy rates, poor tenant mix, and relatively poor mall management impacted the contribution by Grade C malls. Of the total number of 271 operational malls in India, Grade A comprised of 52 malls accounting to 19%. Grade B and C comprised of 35% (94 malls) and 46% (125 malls) respectively.
GROSS LEASABLE AREA & GRADE WISE DETAILS OF THE 271 MALLS ACROSS TOP 8 CITIES IN INDIA
Sharing an overview on the ‘Mall Culture’ in India, Shishir Baijal, Chairman & Managing Director at Knight Frank India said, “The retail real estate sector has reached a new level of maturity where smaller sized and lower grade developments are giving way to Grade A malls. The existing Grade A malls have over 95% occupancy which is indicative of the demand for quality real estate in this segment. Given that retail malls are experiential, more of the future developments will want to create destinations. Therefore, scale and quality of development would require developers to specialise in shopping centre development and operations. Like the office segment, post consolidation, retail real estate too will offer great opportunity for investments including REITs in the future.”
Outlook on Organized Retail Sales Volume and Consumption in Shopping Malls in India
As per the report, between FY 2017-2022, sales volume in the organised retail sector grew at a CAGR of 24% reaching USD 52bn across top 8 cities in India. Furthermore, in the next five years between FY 2023 – 2028 organised retail sales volume is projected to grow at a CAGR of 17% reaching USD 136 bn.
Between FY 2017 – 2022, consumption in shopping malls across top 8 cities in India grew at a CAGR of 3% and stood at USD 8 bn in FY 2022.In FY 2023, the potential consumption is estimated to cross the pre COVID-19 levels reaching USD 11 bn. In the long term, the potential consumption in Indian malls is forecasted to grow at a CAGR of 29% in between FY 2022 – 2028 and is estimated to be at USD 39 bn in FY 2028.
About Knight Frank
Knight Frank LLP is a leading independent, global property consultancy. Headquartered in London, Knight Frank has more than 16,000 people operating from over 384 offices across 51 markets. The Group advises clients ranging from individual owners and buyers to major developers, investors and corporate tenants. For further information about the Company, please visit www.knightfrank.com.
Knight Frank India is headquartered in Mumbai and has more than 1,400 experts across Bangalore, Delhi, Pune, Hyderabad, Chennai, Kolkata, and Ahmedabad. Backed by strong research and analytics, our experts offer a comprehensive range of real estate services across advisory, valuation and consulting, transactions (residential, commercial, retail, hospitality, land & capitals), facilities management and project management.