The Future of Mall Culture in India and Its Impact on Real Estate

Malls have been a prominent feature of the urban landscape in India over the past two decades. Shopping malls, fuelled by the growth in India’s middle class and their increased willingness to spend, have sprung up across major cities in the country. With massive infrastructure investments underway and the growth in organized retail, malls are predicted to play a significant role in the future. This article will explore the future of mall culture in India and its impact on the real estate market.

The Rise of Mall Culture in India

The Indian mall culture began in the late 1990s when Ansal Plaza opened in Delhi, followed by Spencer Plaza in Chennai, and Inorbit Mall in Mumbai. Malls have become increasingly popular among Indian consumers who relish the convenience of having multiple retail options in one location. Early malls in India were primarily shopping destinations, although the landscape has since evolved.

The modern Indian shopper no longer settles for shopping alone but seeks a comprehensive entertainment and food and beverage experience. Malls in India offer movie theaters, gaming arcades, and a range of restaurants and cafes, making them an appealing social destination for families and young adults.

The Future of Mall Culture in India

The future of mall culture in India looks bright, with projections that it will continue to grow. According to a report by Knight Frank India, the organized retail sector in India is expected to grow from $69 billion in 2016 to $115 billion by 2021, at a CAGR of 10%. Experts point to changing consumer habits, an increase in public spending, and strengthening government policies, all of which indicate the likelihood of retail spending continuing to grow.

New malls and mall extensions are in the pipeline in various Indian cities, including the capital city of Delhi. The upcoming Delhi–Mumbai infrastructure corridor is expected to fuel the retail sector, and several malls are scheduled to open in the Delhi-NCR region. The next few years are expected to see a wave of new mall project launches across smaller cities and towns in India.

Impact of Mall Culture on Real Estate

The impact of mall culture on real estate can be significant, with malls often serving as magnets for development and land prices in the vicinity increasing rapidly. With new malls being built all over the country, this trend is predicted to continue. For example, Pacific Mall in Delhi increased the price of land adjoining the mall by 400%.

Malls also have a significant influence on the commercial real estate market. With the growth of organized retail, international brands have been opening stores across major Indian cities. As e-commerce is on the rise, many brands are focusing on opening brick and mortar stores, making malls the ideal outlet for brands looking to establish a physical presence in India.

As per a recent report, vacancy rates for malls in India have increased over the past few years, falling from an all-time high of 19% in 2014 to around 14% in 2019. As the market matures, malls will need to continue to offer unique and differentiated experiences to remain relevant and keep up with the changing retail landscape, especially with the advent of e-commerce.

Conclusion

The rise of mall culture in India is indicative of a booming organized retail sector, changing consumer habits, and a growing middle class. Recent trends and figures suggest that the retail sector and, consequently, mall culture are set to grow. As malls become more central to Indian life, mall developers and retail brands alike will need to continue innovating. Mall culture is here to stay, and stakeholders in the real estate industry must keep an eye on this ever-changing landscape.