IACs expected to grow by 67% to 11 million sq. ft by end of 2028.

MUMBAI, SEPTEMBER 16 2024: Experience economy and the substantial demographic dividend have led to the growth of the entertainment sector in the country. There is a significant shift in the Indian retail landscape, with Indoor Amusement Centers (IACs) emerging as a key driver of footfall and consumer engagement, according to a report by JLL India. The report "Game on! Entertainment as the new frontier in Indian retail," to be unveiled during the MAPIC India (Formerly IRF) event on 18^th -19^th September 2024, deep dives into why and how the Indoor Amusement Centers (IACs) are becoming increasingly important in the Indian retail landscape.

It is seen that Indoor Amusement Centers are becoming one of the major specialty anchors in retail developments. Multiple Indoor Amusement Centers are now present in prominent shopping malls. Currently, over 90 malls across the country host multiple IACs. The report further indicates that India currently has about 6.6 million square feet of operational IACs across over 500 centers in 83 cities. This stock is expected to grow significantly, potentially reaching around 11 million square feet by 2028, representing a 67% increase from current levels.

As developers recognize the importance of IACs in attracting visitors and boosting overall retail performance, the entertainment category is increasingly being integrated into initial mall design phases. This data-rich report underscores the transformative role of entertainment in India's retail sector, pointing to a future where immersive experiences will be central to retail success.

“Tier I cities are the leaders in both number and stock of IACs, driven by a confluence of factors including heightened consumer demand, greater spending ability, and an increasing appetite for experiential offerings. These cities account for 57% of IAC stock (3.75 million sq ft), with Delhi NCR leading at 0.90 million square feet across 68 centers. However, a noteworthy shift is emerging as demand for Amusement Centers is gaining momentum in Tier II and Tier III cities. Operators are capitalizing on this opportunity by establishing large-scale centers in these emerging markets, attracted by competitive real estate rentals and land availability. Tier II and III cities have 2.8 million sq ft of operational IACs.” said Dr Samantak Das, Chief Economist and Head of Research and REIS, India, JLL.

In terms of regional concentration, majority of the IACs in India are located in South India, primarily in Bengaluru, Hyderabad and Chennai. North India has the second highest concentration of IACs in the country, led by the National Capital Region and followed by Ludhiana and Lucknow. Western part of the country ranks third, with Mumbai Metropolitan Region (MMR) and Pune leading the pack.

“Recent leasing activity has been strong, with 1.43 million square feet of space leased by IAC operators in the last 20 months. Delhi NCR secured the largest share of this new leasing at over 0.3 million square feet. Bengaluru stood second with a total of 0.23 million square feet of space take-up. By the end of 2024, 0.61 million square feet of new Indoor Amusement Centers, which have already leased spaces, are expected to become operational. It is interesting to see that emerging formats such as eatertainment*, competitive socializing, and edutainment are also gaining traction apart from the growing stock of gaming arcades and trampoline parks. We foresee an addition of over 3.5 - 4.2 million square feet of new entertainment centers in the next four years, taking the total IAC stock to over 11 million square feet.” Said Rahul Arora, Senior MD and Head - Retail Services and Office Leasing Advisory, India.

Both homegrown and international operators are fueling the rapid development of Indoor Amusement Centers throughout India. Prominent global players have already established a presence in India. Domestic operators are also expanding aggressively across the country and entering newer markets. Notably, some Indian operators are introducing premium formats that offer high-end gaming and dining experiences. This trend reflects the evolving preferences of Indian consumers and the diversification of entertainment options in the country.

Demographics, economic stability, and retail development projections in the next five years signal growth for the entertainment segment. Global travel has expanded consumer expectations, driving demand for experiences that engage and immerse. Indoor Amusement Centers now stand as pillars in retail developments, evolving to provide expansive spaces and activities for all ages. These centers diversify entertainment options, from arcade games to virtual reality and interactive attractions.India 's retail market evolution points towards malls transforming into social hubs and entertainment destinations. The surge in demand for varied experiences will likely spur the rise of standalone Indoor Amusement Centers nationwide, offering multiple entertainment concepts in single locations.

*Eatertainment: Provide an integrated dining and entertainment experience, hosting multiple games and attractions under one roof.

JLL is India’s premier and largest professional services firm specialising in real estate. The Firm has grown from strength to strength in India for the past two decades. JLL India has an extensive presence across ten major cities (Mumbai, Delhi NCR, Bengaluru, Pune, Chennai, Hyderabad, Kolkata, Ahmedabad, Kochi, and Coimbatore) and over 130 tier-II and III markets with a cumulative strength of over 15,000 professionals. The Firm provides investors, developers, local corporates, and multinational companies with a comprehensive range of services. These include leasing, capital markets, research & advisory, transaction management, project development, facility management and property & asset management. These services cover various asset classes such as commercial, industrial, warehouse and logistics, data centres, residential, retail, hospitality, healthcare, senior living, and education. For further information, please visit jll.co.in