February 21, 2024

Shopping mall area to rise 35% over next 3-4 years: Crisil Ratings

Leading research firm Crisil Ratings said that shopping mall space in the country is set to increase by 35 per cent over the next three to four years.

The growth in mall space is spurred by a strong recovery in retail sales in the last financial year, it said.

In absolute terms, the organised retail space is likely to rise by 30 to 35 million square feet, which is one-third of the current stock, the research firm said in a report on Wednesday.

The retail recovery is expected to be sustained due to demand resilience across geographies and sectors.

The report said that the area addition will be aided by continued investor interest in malls and new assets. This, along with comfortable balance sheets, will keep the credit risk profiles of mall owners stable.

Crisil Ratings director Anand Kulkarni said, in the report, that malls are “expected to attract investments of Rs 20,000 crore over the next three to four years”.

“The reasons for the sizable addition are two-fold. Firstly, resumption of work on new supply which was stalled during the pandemic. Secondly, robust retail sales at malls and the subsequent strong operating performance of mall owners,” he said.

Revenues of mall owners for this fiscal are estimated to be around 125 per cent over the pre-pandemic levels, the report added.