Mall operators are now heading for small cities teeming with customers

New Delhi: Tier-2 cities such as Indore, Lucknow, Ahmedabad, Jaipur, Udaipur, Chandigarh and Mohali are set to see supply of close to 2 million sq ft of grade A malls, as retailers are pushing to open stores in smaller cities amid increasing demand.

"Brands have realised where the customer base is and want to move there. We are opening in Indore and Ahmedabad this year, and there is a lot of demand from our existing malls in tier-2 cities," said Rajendra Kalkar, president, west at , which operates more than half a dozen malls in Mumbai, Pune and Bengaluru, and in some tier-2 cities.

Leasing across high streets and malls in India is expected to soar past the pre-Covid-19 levels this year and could see a 25% jump year-on-year in new store openings in 2022, according to international property consultant CBRE.


"Rising disposable income and exposure have led to tier-2 and tier-3 cities driving the growth of malls in the country," said Shibu Philips, director, shopping malls, Lulu Group India. "We at Lulu chose to enter the northern retail market of the country with Lucknow due to the major consumer shift that we have witnessed from tier 2-3 markets. We are soon planning to expand to cities like Varanasi, Prayagraj and Ahmedabad in near future."

Developers such as Phoenix, , Bhumika, Trehan Iris, Sushma and Unity have planned to open malls in these cities, and many of them have also planned expansion to cater to the increasing demand.

"Both international and domestic brands are increasingly looking for space in aspirational cities as consumer moved there during pandemic. Although many offices have reopened, a substantial population continues to work from home and they continue to shop, leading to increase in consumption," said Prateek Mittal, executive director, Sushma Group.

Sushma group plans to deliver 150,000 sq ft of its 350,000 sq ft project in Chandigarh's Zirakpur and plans to expand its retail presence.