Delhi is witnessing an unprecedented boom in shopping malls. It is leaving behind all other metros in this area. We are witnessing a kind of mall mania in the country which is spreading to tier 2 cities also. This boom started in the West 15-20 years back and has come over to India due to its recent economic boom.
Going by the present trends, metros like Delhi, Mumbai, Kolkata, Chennai and Bangalore are the epicenters of mall development. Delhi, according to the available statistics, is leading all these cities. Almost 40% of the country’s retail sale through mall development is taking place in Delhi.
Mumbai has recently entered this area after Mumbai mills and Bandra Kurla land were auctioned for the development of retail shopping malls. Next to Mumbai are Pune and Bangalore followed by Hydrabad and Chennai. But these cities will take at least two to three years to come anywhere near the magnitude of development in Delhi.
There are several reasons why Delhi has taken a lead over the other metros in the country. A key factor for this development is Delhi’s Master Plan which provides for this kind of development through land allotments. The introduction of Metro rail has also contributed to the establishment of malls. Metro rail has shortened the distances in the capital. You could never dream of reaching Connaught place from Dwarka in just 40 minutes. CP has re-emerged as a retail hub for the Delhiites. Metro services will soon be connecting satellite towns - Faridabad, Ghaziabad, Noida and Gurgaon and this will further encourage retail development in suburbs.
Another important factor for the development of malls is the working population of Delhi. Delhi clocks the highest per capita income level in the country. It thus has a very strong pool of people with more disposable incomes than anywhere else in the country.
The suburbs of Delhi have emerged as the hotbeds of new age businesses like the BPOs which have created a huge working population. This explains why the development of malls has been so rapid in these areas. Even though Mumbai is the fashion capital of India, Delhi is equally eyed by all prestigious international brands of fashion and life style products because they know that they will be catering to a ready market.
Another factor is a healthy competition that has emerged among the satellite towns around Delhi. It would be no exaggeration to say that mall mania in Delhi was triggered by Gurgaon beginning from around mid 90s. Haryana government offered land in Gurgaon to developers under the laws which were a lot more flexible than Delhi. It was only after Gurgaon took off as a mall centre that Delhi too realized its potential.
But now the story has gone much far ahead. Now other satellite towns like Noida, Ghaziabad and Faridabad have also joined the fray. A healthy competition is already discernible between these locations as the respective state governments do not want to miss out this retail boom. That is why they have been pitching hard for connecting these satellite towns with Metro services as soon as possible.
In Delhi, the retail space is also commanding a premium which is much higher than in other metros. For instance, the average rental in Delhi is somewhere in the range of Rs.65-70/ sq. ft. as compared to Bangalore's rate of around Rs. 45/ sq. ft. This rate is on a higher side and the developers in Delhi should have more rational rates to offer. Even Delhi Development Authority (DDA) is keeping the reserve prices of retail space too high. This needs to be corrected or else it could turn out to be a dampener in the long-term.