India’s retail real estate sector is experiencing remarkable expansion, with a report from global commercial real estate services firm Cushman & Wakefield forecasting a need for an additional 55 million square feet (MSF) of Grade-A mall space in the next three years. The report, titled Resurgent Retail, attributes this surge in demand to the nation’s rising disposable incomes, urbanization, and an increasing preference for premium shopping experiences. As India marches toward becoming a 5 trillion US Dollar economy by 2027, these trends are expected to further fuel the growth of the retail real estate market.
Cushman & Wakefield’s findings suggest that India’s transition to middle-income status will significantly boost the retail real estate sector, driven by increased consumer spending on discretionary items and experiences. The report also highlights that the demand for top-tier mall spaces is set to outpace current supply, especially in India’s major cities.
The need for quality retail space is particularly critical in the top eight cities, which are expected to see an increase in Retail Shopping Center Penetration (RSPC) to 1.0, similar to levels seen in Indonesia. This transition will require the addition of approximately 55 million square feet of Grade-A retail space over the next three years to meet demand.
Delhi-NCR, particularly Gurugram, is emerging as a key hotspot for this retail expansion. The city’s strategic location, robust economy, and excellent infrastructure have made it a prime destination for retailers aiming to tap into India’s evolving consumer base. The region has seen rapid growth in demand for premium shopping experiences, which, according to industry experts, is expected to continue outpacing supply in the coming years.
Vineet Dawar, Senior Vice President of Sales & Strategy at Elan Group, emphasized, “India’s retail landscape is evolving rapidly, and the demand for premium shopping experiences is outpacing the current supply. Gurgaon, with its thriving economy, cosmopolitan culture, and excellent infrastructure, has emerged as a prime destination for retailers looking to cater to this growing demand.”
Gurugram’s position as a hub for premium retail experiences is supported by ongoing investments in high-quality retail developments, making it a focal point for leading brands and developers. The city’s connectivity, cosmopolitan environment, and strategic infrastructure development, such as the Delhi-Mumbai Industrial Corridor and Dwarka Expressway, continue to bolster its appeal.
Kunal Rishi, COO of Paras Buildtech, remarked that the projections by Cushman & Wakefield were a clear indication of the sector’s growth trajectory. “The demand reflects the rising aspirations of consumers, the expansion of organized retail, and the growing need for premium retail destinations across the country. As urbanization increases, particularly with urban populations expected to reach 40% by 2030, demand for modern, strategically located retail spaces will continue to rise.”
The growing middle class in India, with its increasing disposable income, is a major factor driving the demand for premium retail spaces. This demographic shift is changing consumer consumption patterns, with significant increases in spending on fashion, electronics, home goods, and groceries. The rapid expansion of organized retail is also contributing to the surge in demand, with brands increasingly seeking high-quality retail environments to connect with today’s more affluent, experience-driven consumer.
Sameer Verma, General Manager of Lulu Mall in Lucknow, added, “The Indian retail sector is witnessing a phenomenal boom, fuelled by a combination of factors. The burgeoning middle class, coupled with rising disposable incomes and changing lifestyles, is driving a significant increase in consumer spending.”
Looking ahead, the retail real estate market in India is set to continue its robust growth, with projections for the coming years indicating an even greater demand for quality retail spaces. Retail destinations will increasingly integrate lifestyle, entertainment, and community engagement to meet evolving consumer expectations, creating a new era of retail development in India.
