New Delhi: New supply of mall space was only one-third of projections in India’s top eight cities in April-June, as developers delayed construction due to rising input costs and a cash crunch, according to real estate consultant Cushman and Wakefield.
The eight cities together added just 2.07 million sq. ft of mall space, compared with an estimate for 6 million sq. ft, it said in a report.
The majority of this expected retail space has been staggered to the latter half of the year and next year, said the report that tracked mall supply and rentals in New Delhi and its suburbs, Mumbai, Bangalore, Chennai, Hyderabad, Kolkata, Ahmedabad and Pune.
By the end of the year, the report says, around 16 million sq. ft of new mall space is expected across the eight cities.
According to it, retail rentals have stabilized across main streets and malls in all major cities except for some areas in Kolkata and Mumbai.
While quite a few planned mall projects would not be hitting the market before the next year or two, the pressure for space on existing and emerging high streets will continue to support current rentals, said Rajneesh Mahajan, director of retail services at Cushman and Wakefield.
Also, despite a lack of quality retail space in the market, the top eight cities are currently witnessing around 18% vacancy across the 40 million sq. ft of operational malls.
“This can be attributed to the fact that most of the supply has come within the same micromarkets targeting the same catchments, thereby creating an oversupply within neighbourhoods,” Mahajan said.