Developers intend for larger malls to offer more than just retail.
Developers are increasing the size of their upcoming malls by 30-40% compared to existing ones to accommodate entertainment and services beyond shopping, similar to developed markets such as Dubai and the US.
Leading mall developers, including Prestige, Phoenix, DLF, Lulu and Unity, have planned malls spread over more than one million sq ft area, instead of 500,000-700,000 sq ft leasable area. Experts said malls should not be seen just as shopping centres and that a bigger space could help change their perception as family centres.
“We have about nine malls under construction and the majority of them are over one million sq ft in size,” said Muhammad Ali, CEO, Forum Malls of Bengaluru-based Prestige group. “We are adding auditoriums and dedicated areas for social activities and a fulfillment centre for brands in the mall. It’s not just boxes of shops; malls need to reinvent as physical retail is going to be in demand for years to come.”
The Prestige group is constructing malls in Bengaluru, Hyderabad, Chennai and Kochi.
DLF Mall of India in Gurugram, which is in the planning stage, is likely to be about one and a half times bigger compared to the DLF Mall of India in Noida. The Gururam mall will be about 3 million sq ft while the mall in Goa will be about 550,000 sq ft, which is double the average retail area of a standard mall in Goa.
“When the mall culture came to India, most of the developers started selling the space but later realised they need to give it on lease to maintain the quality,” said Shriram PM Monga, co-founder of retail consultancy firm SRED. “Most of the quality malls in India now give space on lease and don’t sell it. The next phase of change in retail is size and design of the mall and most of the announced projects are almost double the average size,”
Phoenix’s mall portfolio is expected to increase to 14 million sq ft by 2026-27 from 9 million sq ft now, as it plans to deliver at least 1 million sq ft of retail space every year and is evaluating nine markets in India to launch new properties.
Its recently opened mall in Indore is spread over 1 million sq ft, as are most of the upcoming malls.
“In addition to malls getting bigger, it is also important for them to have a mixed-use development. Malls with offices nearby are doing better than the standalone ones. More area allows a developer to have a mix of brands, helping them to bring a range of consumers,” said Harsh V Bansal, co-founder of the Unity group, which operates more than half a dozen malls in Delhi and Punjab.
Dubai’s Lulu group also expects to double its portfolio as it has plans to open malls in Noida, Greater Noida, Ahmedabad, Chennai and Hyderabad. The company is known for its large-sized hyper markets within the malls and is in talks with the local authorities for large land pieces.
As organised retail expands to more markets, shopping malls are likely to benefit the most.
The new retail space top mall operators are adding is expected to come on stream in the next three to six years.
Covid-19 had severely impacted the economy, with bricks-and-mortar retail stores in malls and high streets among the hardest hit. This forced mall operators to pause new developments, but a faster-than-expected recovery in the sector has encouraged them to speed up the activity.
