Retail real estate grows with rising consumption and incomes: Study
India's retail real estate sector is booming, driven by increasing consumption and income levels, attracting major players for investment opportunities.
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Commercial real estate companies are eager to grow their presence in India's retail sector due to the country's rising consumer spending and incomes. A study by Knight Frank and the Confederation of Indian Industry predicts significant retail real estate growth over the next decade, driven by increasing consumer spending and income levels among the youthful population. This growth is expected to boost India's real estate sector to $1.5 trillion by 2034, comprising 10.5% of the economy.
Organised retail consumption is projected to grow from 4.6% to 21% of total private consumption by 2034. This surge in retail real estate consumption is expected to attract more retailers to India, spurring growth in retail real estate, including shopping malls and high street properties.
DLF Retail is constructing a large mall in Gurugram and plans for another mall and high street plaza in Goa. These developments aim to enhance local commercial environments and provide better retail experiences. Rising consumption and incomes are driving these investments. Bhumika Group is investing Rs 250 crore in Faridabad's retail market, expanding its Urban Square Mall in Rajasthan with an INOX-PVR multiplex.
Inorbit Malls India is developing a retail complex in Visakhapatnam and expanding its Vadodara mall. It is also exploring opportunities in 18 cities for future projects, which will add to the growth of retail real estate in India. In 2022, IndiaLand invested Rs 200 crore in Pune's Grand Highstreet Mall of Hinjewadi and plans to invest Rs 140 crore in the upcoming Cade Reality project in Pune, which will include commercial, residential, and retail spaces.
The retail and commercial real estate market is expected to experience significant demand growth by 2024-25 due to economic expansion, infrastructure development, and increased interest from foreign investors. This expansion beyond Tier-I cities reflects a broader trend of diversification and growth in India's real estate sector.
