While this year will see the completion of Grand Central Seawoods, a 40-acre (1.75 million sqft) mall in Navi Mumbai, overall, vacancies are increasing in malls in Mumbai, as in other top cities in India, according to a report from Jones Lang La Salle India, a real estate consultancy.
Mumbai had 8 per cent vacancies in superior-grade malls, and 39 per cent in malls which were the lowest rates, the report said. But this was not unique, with some cities such as Bengaluru reporting as much as 71 per cent vacancy rates in mall space.
In 2016, for the first time in India’s mall history, there was shrinkage in the supply of retail space, said the consultancy. This was owing to closure of some failed malls coupled with limited new supply.
While 13 malls got completed in 2016, 15 malls were withdrawn from the operational stock, resulting in a net effect of 0.3 million sqft reflecting on the supply side, it said.
“While five malls shut down last year, 10 others changed their usage to offices, educational institutes, shopping clusters, hospitals and banquet halls — resulting in (about) 3.5 million sqft of retail space (across 15 malls across India) getting withdrawn from the operational stock,” the report said.
That said, the report was bullish about the prospects of the Indian retail sector in 2017, pointing to the newfound interest of private equity investors in this sector over the previous few quarters.
“Moreover, 2017 appears to be a strong year, with over 9.1 mn sqft of supply expected to come in. Completions expected to be ready by the end of this year have highly-skewed pre-commitment levels,” the report said.
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