- The allocation of F&B space in some shopping centers has increased to 25-30%, from 12-15% during the pre-Covid period.
- This is largely due to the fact that these companies help increase visitor numbers, dwell time and consumer spending.
- More than 70 malls, with a total retail space of 31.02 million square meters, are expected to become operational in seven cities of India.
Malls in India are no longer just malls but places where consumers come to have a coffee or have dinner with loved ones.
In fact, in recent years, food and beverage (F&B) businesses have become important to shopping centers as they help increase visitor numbers, dwell time and consumer spending.
A report from JLL found that F&B space allocation in some shopping centers has increased to 25-30%, from 12-15% during the pre-Covid period. However, the assignment may vary by region.
The report says the strategy behind this was to improve the mall’s overall appeal and brand mix.
For example, the DLF Avenue shopping center in the Saket area of Delhi has 28-30% of its gross lease area devoted to F&B brands, including casual and sophisticated restaurants, bars and cafes, spread over three levels.
“F&B has become a critical differentiator and sometimes also acts as an anchor to improve the overall tenant mix,” said Rahul Arora, head of retail services and office rental consultancy, regional director of India, Karnataka and Kerala, JLL.
F&B businesses were negatively impacted by restrictions and limited capacity rules during the pandemic. As the world moves towards normalcy, F&B has now become one of the main reasons for consumers to visit a mall – for an ‘experience’ in the age of social media.
Interestingly, the placement of popular F&B companies is strategic – they are located on the entrances and exits to attract additional visitors. And this increasing demand for F&B has led to iconic international brands such as Tim Hortons, Popeyes and many more entering the Indian market.
Visitor numbers and sales in the second quarter of FY22 increased significantly for shopping centers. Therefore, rent exemptions and concessions from retail developers have been revoked and most retailers have returned to their original rents in a minimum guarantee plus revenue share model.
Institutional investment by major retail groups has shown a positive growth trajectory, with registered investments of $862 million between 2021 and the first half of 2022, the report said.
Mall developers are now looking to tap into demand in level 2 and 3 cities as well. Several major mall developers such as Lulu Group, DLF, Phoenix Mills and many more announced their plans to establish malls in 2nd and 3rd floor cities.
|Group||Cities where shopping centers are on the rise|
|Lulu Group||Kerala, Ahmedabad, Prayagraj, Varanasi, Kanpur, Gorakhpur|
|Phoenix Mills||Indore, Surat and Ahmedabad|
Source: JLL Report
The report also revealed that more than 70 malls with a total retail space of 31.02 million square feet are expected to become operational in seven cities of India.
“It is encouraging to see that, led by strong demand, a robust supply pipeline from established developers is expected to be operational by 2025,” Arora said.
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