Mumbai: Mall developers are betting on larger malls and foreign direct investment in India to boost growth, according to a report by Jones Lang LaSalle Research (JLL).
“The success of a mall depends on its size as superior grade malls are nearly double the size of average grade malls,” said the JLL report. The average size of a superior grade mall is 400,000 sq. ft, whereas the normal size of an average grade and poor grade malls are 190,000 sq. ft and 150,000 sq. ft, respectively, the report said.
The average size of malls will increase 50% from 200,000 sq. ft in 2007 to exceed 300,000 sq. ft by 2014, said the report.
As mall developers launch bigger projects, an addition 30 million sq. ft space will be added in the next three years, taking the total retail space in malls to 100 million sq. ft, the report said.
Hyderabad will see the highest addition of space, growing 275% from 2012 to 2016. Delhi and Mumbai will see 59% and 24% new additional space in the same period, respectively.
To be sure, retail investment activity slowed in the first half of 2012 and the outlook for the second half of the year is similar. “In key metro cities like Mumbai, New Delhi, Bangalore and Kolkata, the momentum for growth continues, although the pace is slower, and leasing demand remains high,” says Pankaj Renjhen, JLL’s joint managing director of retail for India.
Even though there is new space being developed, there is a mismatch between where the demand is for leasing and the locations where supply is being developed, said Renjhen.