Malls India: Mall operators are now heading for small cities teeming with customers

Tier-2 cities like Indore, Lucknow, Ahmedabad, Jaipur, Udaipur, Chandigarh and Mohali are expected to see nearly 2 million square feet of Class A malls as retailers strive to open stores in smaller cities amid an increasing ask.

“Brands know where their customer base is and want to move there. We are opening in Indore and Ahmedabad this year, and there is high demand from our existing malls in tier-2 cities,” said Rajendra Kalkar, West President at

which operates more than half a dozen malls in Mumbai, Pune and Bengaluru, and in some tier-2 cities.

High street and shopping center leasing in India is expected to rise past pre-Covid-19 levels this year and could see a 25% year-over-year increase in new store openings by 2022, according to international real estate advisor CBRE.

“Rising disposable income and exposure have led to tier-2 and tier-3 cities fueling the growth of shopping centers in the country,” said Shibu Philips, director of shopping centers of Lulu Group India. “We at Lulu have chosen to enter the country’s northern retail market with Lucknow because of the major consumer shift we have seen from the tier 2-3 markets. We plan to expand in the near future to cities like Varanasi, Prayagraj and Ahmedabad.”

Developers like Phoenix,

Bhumika, Trehan Iris, Sushma and Unity have plans to open shopping malls in these cities, and many of them have also planned expansions to meet the increasing demand.

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To establish

“Both international and domestic brands are increasingly looking for space in ambitious cities as consumers moved there during the pandemic. While many offices have reopened, a significant portion of the population continues to work from home and shop, leading to an increase in consumption,” said Prateek Mittal, executive director of Sushma Group.

The Sushma group plans to deliver 150,000 square feet of its 350,000 square foot project in Chandigarh’s Zirakpur and plans to expand its retail presence.

“India’s youth, both on the consumer and supplier side, are driving the retail growth story in tier 2-3 cities. Their willingness to spend money and experiment with entrepreneurship has led to an increase in demand for retail space in recent years,” said Jatin Goel, director of Omaxe Ltd.

Omaxe has seen its leasing business grow in Faridabad, Lucknow, New Chandigarh, Amritsar and Patiala.

The Delhi-based Unity group plans to open two shopping centers in Mohali.

Rajasthan’s Udaipur and Jaipur have also emerged as emerging shopping centers.

The Delhi-based Bhumika group has advanced the construction of Phase 2 of its 350,000-square-meter retail space in the Udaipur Mall as the bulk of Phase 1 has already been leased and will become operational in August.

“In addition, we will deliver a shopping center in Alwar and explore connections in Jaipur Jodhpur, Kota, Bikaner, Ajmer and Delhi-NCR (National Capital Region),” said Uddhav Poddar, general manager of Bhumika Group.

With the easing of the pandemic, the economic recovery has accelerated, encouraging retailers to roll out their store expansion plans that they had put on hold with the Covid-19 outbreak. In fact, it comes as e-commerce’s contribution to total sales has almost doubled every quarter since the start of the pandemic.

“As more and more people shift their bases to tier 2 and 3 regions, there has been a plethora of opportunities for the retail real estate industry. The availability of huge tracts of land at lower rates, rising prices and advances for the future have left large retail chains and shopping malls enticed to come into these regions,” said Ashish Narain Agarwal, CEO of, a brokerage firm.

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