Net leasing of retail space in shopping malls rose by 77 per cent during the first half of 2018 at 1.94 million sq ft in the top seven cities on rising demand from global and domestic brands, according to property consultant JLL India. Net absorption of retail space stood at 1.09 million sq ft in January-June of 2017. On new supply of mall space, JLL said that new completions saw a decline of about 25 per cent to 2.1 million sq ft in H1 2018 over 2.8 million sq ft in H1 2017.
“The retail scenario in India has started to show signs of maturity now, by concentrating on malls that will have longevity, sustainable business and have scope of refurbishment and renovations in the future,” said Ramesh Nair, CEO and Country Head, JLL India. He said the physical asset surrounding retail has become important in creating the right experience.
“Therefore, developer companies are now creating retail destinations rather than mere shopping centres. In the next few years, we will see a concentration of large format malls that will allow shoppers a variety of experience beyond purchase,” he added. Chennai saw the highest absorption at 9,50,000 square feet.
“Chennai saw the completion of a major retail project which attracted many brands to set up and start operations”. Delhi (3,25,000 sq ft) and Hyderabad (3,58,000 sq ft) also saw healthy leasing activities. Mumbai saw total new leasing of 1,18,000 sq ft in H1 2018, while Kolkata witnessed leasing of 1,54,000 sq ft and Pune 33,000 sq ft. No new space was leased in Bengaluru.
With robust leasing activities and lower supply, the consultant said the rentals would remain stable and even firm up over a period of time. “Development companies have been aiming at creating products that match the requirements of retail companies in terms of location, quality of development, as well as design and other relevant aspects to ensure sustained sales velocity,” JLL said.
