Space dedicated to food and beverage companies in malls on the rise post pandemic
- F&B space allocation in some shopping malls has increased to 25-30%, from 12-15% during the pre-Covid period.
- This is largely due to the fact these companies help in increasing footfall, dwell time and consumer spending.
- More than 70 shopping malls, with a total retail space of 31.02 million sq ft, are expected to become operational in seven cities of India.
AdvertisementMalls in India are no longer just shopping hubs but places where consumers visit to grab a cup of coffee or have dinner with loved ones.
In fact, in the last few years, food and beverage (F&B) companies have become important for shopping malls as they help in increasing footfalls, dwell time and consumer spending.
A report by JLL revealed that F&B space allocation in some shopping malls has risen to 25-30%, from 12-15% during the pre-Covid period. However, the allocation may vary from region to region.
The report says that the strategy behind this was to enhance the overall appeal and brand mix of the mall.
DLF Avenue mall in Delhi’s Saket area, for example, has dedicated 28-30% of the gross leasing area to F&B brands, including casual and fine dining restaurants, bars, and cafes spread over three levels.
“F&B has become a critical differentiator and sometimes also acts as an anchor to enhance the overall tenant mix,” said Rahul Arora, head of retail services and office leasing advisory, India regional managing director, Karnataka and Kerala, JLL.
The F&B companies were impacted adversely during the pandemic due to restrictions and limited capacity rules. As the world heads towards normalcy, F&B has now become one of the primary reasons for consumers to visit a shopping mall – for an ‘experience’ in the era of social media.
Interestingly, the placement of popular F&B companies is strategic – they are at the entry and exit points to draw additional footfall. And this increasing demand for F&B has pushed iconic international brands like Tim Hortons, Popeyes and many more to enter the Indian market.
The footfall and sales in the second quarter of FY22 has significantly risen for malls. Therefore, rent waivers and concessions provided by mall developers have been withdrawn, and most retailers have come back to their original rents in a minimum guarantee plus revenue share model.
Institutional investment by big groups in the retail sector has shown a positive growth trajectory, with recorded investment of $862 million between 2021 and the first half of 2022, the report said.
AdvertisementMall developers are now looking to tap demand in tier 2 and 3 cities as well. Various big mall developers like Lulu Group, DLF, Phoenix Mills and many more announced their plans to establish shopping malls in tier 2 and 3 cities.
Source: JLL report
|Group||Cities where malls are coming up|
|Lulu Group||Kerala, Ahmedabad, Prayagraj, Varanasi, Kanpur, Gorakhpur|
|Phoenix Mills||Indore, Surat and Ahmedabad|
The report also revealed that more than 70 shopping malls encompassing a total retail space of 31.02 million sq ft are expected to become operational in seven cities of India.
“It is heartening to note that, led by buoyant demand, a robust supply pipeline by established developers is expected to get operational by 2025,” Arora further said.
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