The retail scenario in India has started to show signs of maturity now, by concentrating on malls that will have longevity, sustainable business and scope of refurbishment and renovations in the future. As Indian consumers become more discerning, the physical asset surrounding retail has become important in creating the right experience. Therefore, developer companies are now creating retail destinations rather than mere shopping centres. In the next few years, we will see a concentration of large format malls that will allow shoppers a variety of experience beyond purchase.
Developers are making use of past experiences and learning to create superior quality malls. Some of the key factors determining the success of malls will be design, varied tenant mix, the strength of catchment, infrastructure, amenities, etc. But an increasingly influencing factor will be the mall’s ability to counter shoppers’ expectation for ‘experience’. Out of the upcoming supply, the malls under the superior category will do well as they have the right fundamentals. We will continue to see stock consolidation as some of the weak properties will divert to non-retail uses like small offices, hospitals, educational, healthcare and survive.
The increased pace of leasing activity is heartening as it signals a growth phase for retail in India. Brands, both national and global, are looking at increasing their presence in key markets to capitalise on the stability and growth of the economy. Having said that, customer preferences both for brands and retail malls have been altered and today customers view retail malls not only as shopping centres but also as entertainment hubs and lifestyle destinations. Brands are also discerning about the location of their stores, and are therefore choosing to align with retail malls that have higher footfalls and better conversion rates per footfall.
Landlords in India are actively adjusting tenant mixes and are placing greater emphasis on the experience of shopping. International brands have been entering the country and are expanding rapidly in the past couple of years, with more expected to look for quality space across the country.