Nearly two years after selling two-thirds of its retail business to Blackstone-backed Nexus Malls, Bengaluru-based Prestige Group plans to again rebuild its mall portfolio with eight new ones in the next four years, said a senior official.
In 2021, the company sold 4.4 million sq ft of retail space spread across seven shopping malls with an estimated value of ₹9,000 crore. Prestige group plans to expand its current retail portfolio from 2 million sq ft across four malls to 9 million sq ft across 12 malls in four years.
“This is the next phase of expansion and most of our upcoming malls will be above one million sq ft as retailers need bigger space now. Construction at most of the upcoming malls has started and they are located in Bengaluru, Kochi and Chennai,” said Muhammad Ali, CEO, Forum Malls of Prestige Group, which is planning to enter Mumbai and Goa and is exploring land to develop mall in Delhi-NCR, Hyderabad and Kolkata.
Organised retail is only about 13% of the total retail portfolio of the country and developers believe there is a great opportunity to build more malls. All brands are in that growth phase, where they are looking for space.
“We want to do a mall in Delhi for sure, and that has been on our radar for a very long time. There is more potential to do malls in Hyderabad that’s a growing city with a young population. We will still continue to look for space there and we would like to do malls in Kolkata, West Bengal, if we get a land parcel,” Ali said. The executive said people were aspiring to live well. And that will continue to drive retail growth in country.
“There was a mall rush in India and developers started building malls as they tapped a new category. But almost 50% of the malls in India didn’t work because most of them sold the area instead of leasing it. There are less than 100 malls in India, which are successful and running at over 90% occupancy,” Ali said.
Mall operators are expected to clock 7%-9% revenue growth in the current fiscal despite high-base effect of last year due to high occupancy and leasing rates, according to Crisil. Top seven Indian cities will add nearly 11 million square feet of mall space – the size of more than 145 football fields – in 2023, as developers rush to deliver new properties after a hiatus during the pandemic, according to a report.