SHOPPING MALLS STALLED
Three shopping malls became operational and 13 got deferred in the top eight cities of the country during the first six months of 2013 as developers are either cautious or facing cash crunch, property consultant Cushman & Wakefield said today. "The top eight major cities witnessed a total mall supply of 2.94 million square feet (3 malls) during the first half of 2013 with over 64 per cent (13 malls) of the total expected supply deferred," C&W said in a statement. The national capital region (NCR) witnessed the deferment of five malls, followed by two in Pune, Hyderabad, Chennai and one each in Kolkata and Bangalore. "There is considerable demand for quality retail spaces in both shopping malls as well as main streets in most cities. However retailers, though optimistic about their expansion plans, are showing caution prior to launching new stores, which has resulted in the deferment of malls where occupancies have been low and where developers have faced some liquidity issues," C&W Executive Managing Director (South Asia) Sanjay Dutt said.
The malls now prefer to open with near full occupancy, as was seen in some recent cases, he added. "This trend of mall deferment across can be attributed to a number of reasons. Primarily, developers are facing liquidity issues to complete the construction of their malls," the statement said. Moreover, retailers are cautious in opening new stores and are carrying out comprehensive due diligences to understand their market before making commitments. "Developers are not in a position to launch their malls until they get sizeable occupancy that can support the operations of the mall," C&W said.
The consultant noted that Hyderabad’s AS Rao Nagar main street recorded maximum rise in rentals (33 per cent) over last quarter, followed by main streets of Punjagutta (29 per cent), Ameerpet (19 per cent) and Kukatpally (17 per cent). Hyderabad's Raj Bhavan Road/Somajiguda (-14 per cent) and Abids(-12 per cent) main streets witnessed sharpest fall in rentals, followed by Koregaon Park in Pune (-10 per cent) Malls in Mumbai's Vashi registered sharpest rental appreciation of 18 per cent. Malls in Pune's Bund Garden Road/ Koregaon Park and Hyderabad's NTR Gardens witnessed sharpest drop of 17 per cent in rentals.