Delhi-NCR has experienced a robust leasing performance, particularly in Noida, driven by rising disposable incomes, a youthful demographic, and rapid urbanisation.
The national capital region (NCR) tops the list of 29 cities in the country with 31.3 million sqft of gross leasable area (GLA) in 2023, while Bengaluru tops the list in the top-8 markets with the highest shopping centre density, according to ‘Knight Frank India’s research report – Think India, Think Retail 2024’.
According to the report, Tier 1 cities have 94.3 mn. sq. ft. of cumulative GLA of shopping centre stock, while Tier 2 cities collectively offer a gross leasable area of 30.8 mn sq ft., comprising 75 per cent and 25 per cent, respectively.
Kunal Rishi, chief operating officer of Paras Buildtech, said, “Delhi-NCR has experienced a robust leasing performance, particularly in Noida, driven by rising disposable incomes, a youthful demographic, and rapid urbanisation. The Noida Expressway has become a prime destination for commercial and retail supported by modern amenities, ample space for new developments, and proactive government initiatives, establishing the Noida Expressway as a critical hub in India’s commercial landscape.”
Among Tier 1 cities, Bengaluru stands out with a notable shopping centre density figure of 1,147 sq ft, reflecting its robust retail infrastructure and commercial vibrancy. Following closely, Pune and NCR also demonstrate substantial shopping centre density values of 1,142 sq ft and 949 sq ft respective, the the report added.
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Shopping centre density is an important metric that shows the availability of shopping centres in relation to the population size.
Madhusudan G, chairman and managing director, Sumadhura Group, said “High shopping centre density in Bengaluru highlights it as an aspirational city. Bengaluru and NCR both attract significant retail investment besides setting a high benchmark for international brands. These tendencies present a golden opportunity for developers to build experiential shopping destinations besides driving local and global investors to invest in prime locations for providing a unique retail experience to consumers.”
The Indian retail industry is rapidly growing and accounts for 10% of the country’s gross domestic product (GDP) and 8% of the workforce. The sector is witnessing exponential growth with the development of shopping centres and new retail destinations, not just in major metros but also in Tier 2 cities.
Aman Sharma, managing director of Aarize Group, said, “Leasing activity in the retail sector has seen a significant surge, driven by the demand for quality retail spaces in prime locations. Creating spaces that attract and retain top-tier retailers is crucial for the sector’s growth. The current market dynamics call for innovative developments that offer accessibility, modern infrastructure, and adaptability to meet the evolving needs of retail businesses.”
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According to the report, of the 82% stores located in top 8 cities, NCR with 23%, Bengaluru with 18%, and Hyderabad with 15%, account for the top 3 cities with the maximum number of high street stores.
Developers in Bengaluru say the shopping experience that some high streets in Bengaluru and NCR provide cannot be matched by shopping centres.
Shesh Rao Paplikar, Founder & CEO, BHIVE Group said, “The dominance of high streets in these cities, which feature a good mix of regional as well as international brands, indicates that modern customers demand more than just a place to shop. These places serve as commercial centres as well as cultural landmarks that attract tourists and locals alike. For developers, the task at hand is to enrich these spaces with traditional market appeal besides accommodating the evolving needs of retailers and consumers.”
Both Bengaluru and NCR have witnessed a drop in vacancy percentage in the last one year, the report said.
Akash Nagpal, VP, leasing, Trehan Iris, says, “The report highlights the increasing retailer preference for Grade A shopping centre stock with vacancy rates of just 5.1%, reflecting strong demand and low availability. Furthermore, this underscores NCR’s dominance in leased areas reflecting its status as a key hub for premier shopping center developments, emphasizing the evolving dynamics of India’s retail market.”
The Indian retail sector is expected to grow at CAGR of 23% between 2023-24 and 2028-29. Even as retailers encounter the growing challenge from e-tailers, the rising disposable income, growing youth population, urbanisation and experiential retail formats will provide a momentum to the sector.
