India's retail sector needs 55 million square feet of premium mall space in the next four years, says a Cushman & Wakefield report. The country's Retail Space Per Capita (RSPC) is much lower than South Asian countries like Indonesia, the Philippines, and Vietnam. Despite increasing consumer demand and more international brands entering the market, the growth of Grade-A malls has been slow. The report suggests that India must boost mall construction by nearly four times the current rate to meet the demand and match Indonesia's retail space by 2027.
A recent report by Cushman & Wakefield says India's retail sector needs 55 million more square feet of Grade-A malls by 2027 to meet demand. Right now, India has only 61 million square feet of Grade-A retail space in its top eight cities. This equals just 0.5 square feet of retail space per person, which is much less than countries like Indonesia, the Philippines, and Vietnam. India's retail space per person is far behind, showing a big opportunity for growth. If mall space doesn't increase, India could fall further behind these smaller countries in retail infrastructure.
The report points out India's low Retail Space Per Capita (RSPC), which shows how much retail space is available per person. This is much lower than in smaller countries like Indonesia, the Philippines, and Vietnam. Because of this shortage, vacancies in Grade-A malls are very low. In the last eight years, India has added only 20 million square feet of grade-A malls. Each year, about 2.5 million square feet have been developed. This growth is slow, even though consumer demand is rising, especially in cities. The report shows that spending on non-essential items like travel and premium products has increased while spending on essentials has gone down.
In the first half of 2024, no new malls were built. The total Grade-A mall space remains at 61 million square feet. To reach 1.0 square feet of retail space per person by 2027, India needs to build 9 to 11 million square feet of retail space each year. This is almost four times the current rate. India is becoming a key market for international retailers. The report shows the number of global brands entering India has more than doubled since before COVID-19. In 2024, 25 brands entered the market on average, compared to just 12 before the pandemic. This growing interest is driving up demand for premium retail spaces.
India's economy is growing, incomes are rising, and infrastructure is improving. Saurabh Shatdal of Cushman & Wakefield says consumer confidence and spending show the sector's potential. However, he stresses the need to speed up building Grade-A malls to meet demand. Currently, only 18 million square feet of mall space is planned through 2027, which is far below the needed amount. Indian developers have a chance to meet this demand and bring the country's retail space closer to that of nations like Indonesia. Because of the mall shortage, high streets and office retail complexes (ORCs) are growing fast. These spaces are attracting many retail tenants and offer prime visibility to consumers. Over 70 ORC projects have been completed recently, becoming popular options for retailers and shoppers alike.
India's retail sector is poised for significant growth, yet it faces a critical shortage of Grade-A mall space, with an urgent need to quadruple the current development rate to meet rising demand. The growing interest from international retailers and increasing consumer spending highlight immense potential, but swift action is required to bridge the gap and prevent falling further behind in retail infrastructure compared to smaller nations. Indian developers have a unique opportunity to capitalise on this demand and elevate the country's retail landscape.
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