Call it a compelling case of India's growth story or revenge consumption triggered by two years of Covid-induced lull, Indians are back to the malls, shopping like never before. Inflation that has been far from benign in the recent months has hardly made any dent in consumer spending. "Average ticket sizes have gone up by 25%. People have all come back. They are shopping the way they used to...even more than what they used to," Dalip Sehgal, CEO at Nexus Malls, tells Fortune India. As the country's middle income segment covering some 350-400 million people get economically equipped with increasing purchasing power, it widens the scope for mall operators. "Consumption will grow and that's where malls will come in. The headroom for growth for this industry is enormous," says Sehgal, tasked with steering the growth of India's largest mall operator.

In fact, sensing consumers' robust appetite to spend, brands are already scrambling for mall spaces. Top local retailers are looking to add anywhere between 5,000 and 7,000 stores in the next 12 months. International brands collectively are scouting for retail spaces to set up a few hundred outlets. "The demand today is more than what the industry can supply. There are only about 100 odd malls of decent size. And we could probably do with three times that number," says Sehgal. The footwear segment, for instance, is a category where almost every single brand either wants new stores or additional spaces. Those with a store size of say 2,000 square feet want to upgrade to a 4,000 square feet outlet, the demand is that huge, says Sehgal. "I am not sure if we have enough A-grade retail space currently available to meet this demand," says the CEO of Nexus Malls. F&B (food and beverage) and (family) entertainment are other two segments that are cornering the larger share of consumer's time and attention. These two categories are expected to jointly cover 15%-20% of mall spaces in the next three to five years. "Family entertainment is becoming bigger and bigger. Earlier we used to have one family entertainment centre in our malls, today we probably have two and we are looking to add a third one," says Sehgal.

The time is ripe for players to cash in on the spending boom after industry growth was somewhat capped by two years of the pandemic. "The opportunity for us to acquire malls in the future is also quite exciting," says Sehgal. Nexus Malls, the Indian retail portfolio arm of the Blackstone Group that has a portfolio of 17 malls spanning 13 cities, is reportedly looking to acquire New Delhi's premium Select Citywalk mall in a deal that could be valued at as much as ₹3,000-4,000 crore. The firm clinched a $1.2 billion deal to acquire eight Forum malls from the Prestige Group amid the pandemic, adding 10 million square feet of retail space under its management. "We can leverage the size and scale to bring in the best of the best malls," says Sehgal.

Post-Covid recovery has been good. Sehgal claims that sales across its properties increased by 125% in the April-June quarter compared to the corresponding pre-Covid period of Q1FY20. "Growth is coming from both metros/large towns as well as tier two and three towns. Aspirationally, the smaller towns are no different from the larger towns. Our mall in Bhubaneswar has seen a growth of 150% over the pre-Covid period," says Sehgal.

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