Retail realty in growth mode as consumption, incomes rise

Commercial real estate players are looking to expand their footprint in the retail segment, driven by India's increasing consumption and income levels.

- ANEEKA CHATTERJEE

The domestic consumption market in India is likely to rise considerably in the coming decade, supported by rising income levels and an increase in spending capacity, especially among the burgeoning young aspirational population, according to a joint study by the Confederation of Indian Industry and Knight Frank.

India's real estate sector is set to reach $1.5 trillion by 2034, accounting for 10.5 percent of the economy, according to the report.

As of 2023, organised retail consumption is estimated to be at 4.6 percent of the total private consumption of individuals.

However, by 2034, the share of retail consumption is estimated to grow to 21 percent of the total private consumption.

This quantum of consumption boost will support the entry and expansion of retailers in India and give a fresh impetus to retail real estate both for shopping malls and for high street.

For instance, DLF Retail is erecting a 2.7 million square feet (msf) mall in Gurugram. The company also plans to start a mall spanning 700,000 square feet (gross leasable area), along with a high street shopping plaza in Goa.

These developments aim to elevate the local urban and commercial environments, enriching the region's offerings.