ICRA forecasts robust growth in India's retail mall sector in FY2025

15 Dec 2023 CW Team

Delhi NCR leads with a 30% supply contribution, followed by Bengaluru (20%), MMR (17%), Pune (14%), Hyderabad (13%), and Chennai (6%). ICRA foresees Delhi NCR, Pune, and Hyderabad accounting for 85% of the new supply in FY2025, with 10% of the upcoming supply already pre-leased as of September 2023.

Mall operators can expect a 9-10% YoY growth in rental income in FY2024 and 8-9% in FY2025. This growth is attributed to healthy occupancy levels, projected increases in trading values, and rental escalations.

In H1 FY2024, ICRA's sample set experienced an 8.4% YoY increase in rental income. Anupama Reddy, Vice President and Co-Group Head, Corporate Ratings at ICRA, notes the strong rebound in footfalls and trading values seen in FY2023 and H1 FY2024. She anticipates a 14-15% increase in trading values in FY2024 and a 10-12% growth in FY2025, driven by factors like premiumisation and robust urban consumption.

Various segments, including jewellery, electronics, premium apparel, beauty care products, and entertainment, have witnessed above-average consumption growth in recent quarters. This trend is expected to continue in the near to medium term due to strong consumer demand.

The private final consumption expenditure component of India's GDP has been on the rise, supported by increased spending by households. According to the RBI?s Consumer Confidence Survey of September 2023, household spending has remained buoyant over the past year, driven by higher essential and non-essential spending. This trend is expected to persist over the next 12 months, providing support for retail sales among mall operators' tenants.

Although net absorption was robust at 3.2 msf in H1 FY2024, vacancy levels increased marginally by 100 basis points to 20% as of September 2023, primarily due to the recent operationalisation of 5.6 msf of new supply. ICRA anticipates occupancy levels to be sustained at 81-82% as of March 2024 (compared to the previous year's 81%) and to improve to 82-83% by March 2025.

Reddy concludes that ICRA expects the credit profile of mall operators to remain stable, supported by healthy Net Operating Income (NOI) driven by trading value and rental growth, moderate leverage, and comfortable debt coverage metrics.

The combined retail mall space in the top six markets, totalling 105 million square feet (msf), is projected to rise to 116-118 msf by March 2025. According to credit rating agency ICRA, the anticipated new supply in India's top six cities is 9-10 msf in FY2024 and approximately 6 msf in FY2025. Delhi NCR leads with a 30% supply contribution, followed by Bengaluru (20%), MMR (17%), Pune (14%), Hyderabad (13%), and Chennai (6%). ICRA foresees Delhi NCR, Pune, and Hyderabad accounting for 85% of the new supply in FY2025, with 10% of the upcoming supply already pre-leased as of September 2023. Mall operators can expect a 9-10% YoY growth in rental income in FY2024 and 8-9% in FY2025. This growth is attributed to healthy occupancy levels, projected increases in trading values, and rental escalations. In H1 FY2024, ICRA's sample set experienced an 8.4% YoY increase in rental income. Anupama Reddy, Vice President and Co-Group Head, Corporate Ratings at ICRA, notes the strong rebound in footfalls and trading values seen in FY2023 and H1 FY2024. She anticipates a 14-15% increase in trading values in FY2024 and a 10-12% growth in FY2025, driven by factors like premiumisation and robust urban consumption. Various segments, including jewellery, electronics, premium apparel, beauty care products, and entertainment, have witnessed above-average consumption growth in recent quarters. This trend is expected to continue in the near to medium term due to strong consumer demand. The private final consumption expenditure component of India's GDP has been on the rise, supported by increased spending by households. According to the RBI?s Consumer Confidence Survey of September 2023, household spending has remained buoyant over the past year, driven by higher essential and non-essential spending. This trend is expected to persist over the next 12 months, providing support for retail sales among mall operators' tenants. Although net absorption was robust at 3.2 msf in H1 FY2024, vacancy levels increased marginally by 100 basis points to 20% as of September 2023, primarily due to the recent operationalisation of 5.6 msf of new supply. ICRA anticipates occupancy levels to be sustained at 81-82% as of March 2024 (compared to the previous year's 81%) and to improve to 82-83% by March 2025. Reddy concludes that ICRA expects the credit profile of mall operators to remain stable, supported by healthy Net Operating Income (NOI) driven by trading value and rental growth, moderate leverage, and comfortable debt coverage metrics.

Infrastructure Transport

13 Oct 2025

Tata, Airbus to Build India’s First Private Helicopter Line

In a landmark development for India’s aerospace sector, Tata Advanced Systems Limited (TASL) and Airbus will establish the country’s first private-sector helicopter assembly line in Vemagal, Karnataka. The facility will manufacture the Airbus H125 and H125M, marking a significant milestone in India’s push for self-reliance in aviation and defence manufacturing. The new Final Assembly Line (FAL) will produce the H125, the world’s best-selling single-engine helicopter, known for its versatility and performance in extreme environments. The first ‘Made in India’ H125 is expected to ro..

Infrastructure Urban

13 Oct 2025

NeGD to Support Bharat Taxi in Building Cooperative Ride Platform

In a significant move for India’s digital and mobility transformation, the National e-Governance Division (NeGD) of the Digital India Corporation, under the Ministry of Electronics and Information Technology (MeitY), has entered into an advisory partnership with Sahakar Taxi Cooperative Limited, the company behind Bharat Taxi — a first-of-its-kind, cooperative-led national ride-hailing platform. A Memorandum of Understanding (MoU) has been signed between NeGD and Sahakar Taxi to provide strategic advisory and technical support covering key areas such as platform integration, cybersecurity..

Technology

13 Oct 2025

MeitY Hosts Pre-Summit for India–AI Impact Summit 2026

The Ministry of Electronics and Information Technology (MeitY), Government of India, hosted a series of Pre-Summit events for the upcoming India–AI Impact Summit 2026 at the India Mobile Congress (IMC) 2025 in New Delhi. These sessions mark a key milestone ahead of the main summit, scheduled for 19–20 February 2026 at Bharat Mandapam, New Delhi. Delivering the inaugural address, S. Krishnan, Secretary, MeitY, highlighted India’s innovative and frugal approach to AI development. “We have adopted innovative means by learning from others’ experiences to build projects and products that..