Over 30% retail mall space delayed till next year: Cushman & Wakefield
According to a recent Cushman & Wakefield report, the Indian retail real estate market recorded a deferment of more than 30 percent of retail mall space against the projected supply for the first half of the year. Approximately, 1 million sq.ft. of expected mall supply was deferred to second half of the year or next year. The overall vacancy rate for the major cities as of H1 2012 stood at 19.6 percent, marginally higher than the previous quarter.
NCR saw the highest mall supply deferment of over 80 percent maintaining vacancy levels at 28 percent. The region saw only 120,000 sq.ft. of mall supply in Q1 and no supply in the second quarter of 2012.
Bangalore witnessed the highest mall supply of 1.5 million sq.ft. in H1 2012. The retail activity in the city continues to remain strong as the new mall supply became operational with 90 percent occupancy, whilst overall city level mall vacancy stood at 12.6 percent.
Commenting on the findings of the report, Jaideep Wahi, Director, Retail Services, Cushman & Wakefield India, said: “This slowdown in mall construction need not be viewed as a negative growth indicator for the retail real estate segment. The current pace is, in fact, expected to help in maintaining a healthier supply to demand equation; especially for oversupplied micro-markets. With high vacancy levels as well as cautious expansion plans of retailers, the deferment of supply is a necessary measure to bring stability in the retail market.”
The report also highlights that rental values across most mall destinations within these cities remained largely stable, except for certain micromarkets in Bengaluru, NCR, Kolkata, and Mumbai where mall rentals have seen a growth over the previous quarter in the range of 2-13 percent. Elgin Road in Kolkata recorded the highest growth in mall rents at 12.4 percent over last quarter mostly owing to renewals of existing tenants at a higher value.
In the same period, some prominent high streets across major cities recorded higher increase in rental values as against malls, reflecting the bent of interest amongst retailers for high street properties. Select locations across Bengaluru (MG Road, Jayanagar, Koramangala, and Vitthal Mallya Road) recorded rental increments in the range of 8-9 percent over the previous quarter. Camac Street in Kolkata saw the highest increase in high street rentals at 25 percent followed by MG Road in Bengaluru at just over 9 percent.
According to a recent Cushman & Wakefield report, the Indian retail real estate market recorded a deferment of more than 30 percent of retail mall space against the projected supply for the first half of the year. Approximately, 1 million sq.ft. of expected mall supply was deferred to second half of the year or next year. The overall vacancy rate for the major cities as of H1 2012 stood at 19.6 percent, marginally higher than the previous quarter.
NCR saw the highest mall supply deferment of over 80 percent maintaining vacancy levels at 28 percent. The region saw only 120,000 sq.ft. of mall supply in Q1 and no supply in the second quarter of 2012.
Bangalore witnessed the highest mall supply of 1.5 million sq.ft. in H1 2012. The retail activity in the city continues to remain strong as the new mall supply became operational with 90 percent occupancy, whilst overall city level mall vacancy stood at 12.6 percent.
Commenting on the findings of the report, Jaideep Wahi, Director, Retail Services, Cushman & Wakefield India, said: “This slowdown in mall construction need not be viewed as a negative growth indicator for the retail real estate segment. The current pace is, in fact, expected to help in maintaining a healthier supply to demand equation; especially for oversupplied micro-markets. With high vacancy levels as well as cautious expansion plans of retailers, the deferment of supply is a necessary measure to bring stability in the retail market.”
The report also highlights that rental values across most mall destinations within these cities remained largely stable, except for certain micromarkets in Bengaluru, NCR, Kolkata, and Mumbai where mall rentals have seen a growth over the previous quarter in the range of 2-13 percent. Elgin Road in Kolkata recorded the highest growth in mall rents at 12.4 percent over last quarter mostly owing to renewals of existing tenants at a higher value.
In the same period, some prominent high streets across major cities recorded higher increase in rental values as against malls, reflecting the bent of interest amongst retailers for high street properties. Select locations across Bengaluru (MG Road, Jayanagar, Koramangala, and Vitthal Mallya Road) recorded rental increments in the range of 8-9 percent over the previous quarter. Camac Street in Kolkata saw the highest increase in high street rentals at 25 percent followed by MG Road in Bengaluru at just over 9 percent.
No comments:
Post a Comment