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Real estate industry

NCR Market to Lead Retail Realty Development in India

Strategic Insights

— 1 min read

The National Capital Region (NCR) market in India is poised to lead retail real estate development, with a predicted 78 new shopping malls totaling over 25 million square feet expected to be operational by 2008. Knight Frank's report, "India Retail Market Review," highlights the NCR's growth prospects, but also cautions about the risk of supply exceeding demand due to the large number of malls planned. To succeed in the competitive market, malls will need to have a favorable location, a well-designed retail mix, and a thought-out operational and marketing strategy.

Key Takeaways:

  • The NCR market is expected to lead retail real estate development in India, with 78 new shopping malls totaling over 25 million square feet to be operational by 2008.
  • The current stock of retail space in the NCR is about 10.63 million square feet, with a supply of 25.39 million square feet of new organized retail space expected to enter the market between 2006-08.
  • Delhi is expected to account for 34% of the new retail space, followed by Noida (31%), Gurgaon (13%), Greater Noida (10%), Ghaziabad (8%), and Faridabad (4%).
  • The trend of developing large format malls (over 300,000 square feet) is catching up with new mall developers, driven by the growing middle-class population's desire for shopping and entertainment.
  • Noida, Greater Noida, and Ghaziabad are emerging markets for large format retail development due to reasonable real estate costs, land availability, and low-cost labor.
  • The strategy of setting up hotels in malls is also gaining traction, with Pacific Mall in Delhi already having set up a budget hotel, and other developers expected to follow suit.
  • High street retail in places like South Extension, Connaught Place, Greater Kailash, and Vasant Kunj will continue to demand high prices due to a lack of fresh supply.

Statistics:

  • 78 new shopping malls totaling over 25 million square feet expected to be operational in the NCR by 2008.
  • 10.63 million square feet of current retail space in the NCR.
  • 25.39 million square feet of new organized retail space expected to enter the NCR market between 2006-08.
  • 34% of new retail space in the NCR expected to be in Delhi, followed by Noida (31%), Gurgaon (13%), Greater Noida (10%), Ghaziabad (8%), and Faridabad (4%).

Sources:

  • PTI - "NCR market to lead retail realty development: Knight Frank" (October 24, 2006)
  • Knight Frank - "India Retail Market Review" (2006)

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