Mumbai: Property firm Sheth Developers has tied up nearly half the space at its upcoming 1 million square-foot mall in India’s financial capital, as demand for commercial real estate picks up on the back of increased retail activity.
The Mumbai-based developer has lined up retailers Shopper’s Stop and Hypercity, as well as Mexico-based multiplex chain Cinepolis as anchor tenants for the under-construction Vivacity mall at Thane, a Mumbai suburb, J.P. Biswas, Sheth’s vice-president for marketing & leasing, said on Monday.
“We had slowed down construction work in between after the market had slumped. But the bad time is over and our leasing team is getting a very good response now,” he said.
Property prices in major Indian cities such as Mumbai and Delhi have nearly doubled in the past year, after a 2-year slump, as home and office buyers return and mortgage rates remain in single-digits.
Sheth expects to earn a premium to market rates for the balance of the space at the mall, which is scheduled to start operations by August 2011 and has a total saleable area of 670,000 sq ft.
Mumbai is rated among the most expensive real estate locations in the world.
Sheth, which focuses on residential property in Mumbai, is charging anchor tenants average rentals of Rs60 per sq ft per month for the mall project, but hopes to lease the balance space at about Rs150 per sq ft per month, Biswas said.
Current retail rentals in the Thane area average around Rs120 per sq ft.
“We expect the mall to do total business between 75 and 80 crore (Rs800 million) a month, when fully operational,” Biswas said.
The mall project, estimated to have been built at a cost of Rs6 billion, has been funded through internal accruals and debt. Almost 70% of the construction has been completed.