It is expected that mall operators will see a year-on-year increase of 9-10% in rental income for the current financial year, followed by a slightly lower growth of 8-9% in 2024-25. This growth is driven by robust occupancy levels, trading value growth, and rental escalations. In India’s top six cities, around 9-10 million sq ft of new supply is anticipated in 2023-24 and approximately 6 million sq ft in 2024-25. Despite healthy net absorption in the first three quarters of the financial year, vacancy levels rose to 20% by December 2023 due to recent operational new supply yet to reach full capacity. ICRA predicts occupancy levels to be sustained at 81-82% by March 2024 and to improve to 82-83% by March.
Mr. Anupama Reddy, Vice President and Co-Group Head Corporate Ratings at ICRA, noted a significant rebound in footfalls and trading values for retail mall operators in FY2023, with this trend continuing in the first nine months of FY2024. With anticipated growth in footfall, increased spending due to premiumization, and strong urban consumption, ICRA forecasts trading values to increase by 14-15% in FY2024 and record a 10-12% expansion in FY2025, building on a high base.
