NET ABSORPTION IN MALLS RISE BY 70% Y-O-Y IN Q1 2018
RETAIL MALL SUPPLY DROPS IN Q1 2018
Mumbai, May 12, 2018: JLL, India’s largest real estate services firm, notes that retail mall absorption recorded a positive trend in Q1 2018 (January – March). Total absorption across top 7 cities of India was recorded at 352,000 square feet (sq. ft.) recording a rise of 69% over the same time last year. The supply side of the market recorded an addition of only 160,000 sq. ft. of fresh mall supply by adding just 2 new shopping malls in Delhi – NCR.
Source: JLL Research
*Note: negative values depict freshly vacant mall space that was not followed by renewal or new occupant
Of the total leasing activities, 84% took place in Delhi – NCR which recorded 292,000 sq. ft. of mall space absorption. The other markets that saw some decent absorptions were Hyderabad (31,000 sq. ft.) and Chennai (17,000 sq. ft.).
Total mall space supply recorded in Q1 2018 was lower by close to 90% from same time last year and was recorded at just 160,000 sq. ft. contributed by 2 shopping center in Delhi – NCR. The market saw a withdrawal of close to 1 million sq. ft. of mall space bringing down the total retail space stock by 1% to 74.5 million sq. ft. from the previous 75.6 mn. sq. ft. The malls that close are typically those which were constructed many years back and did not go through periodic modifications to suit changing requirements of retailers and shoppers
The vacancy levels across mall spaces remained stable across most markets with the exception of Delhi – NCR (18%), Hyderabad (11%) and Chennai (7%) that saw marginal decline over past quarter.
Ramesh Nair, CEO and Country Head, JLL India said, “The increased pace of leasing activities is heartening as it signals towards a growth phase for retail in India. Brands, both national and global, are looking at increasing their presence in key markets, to capitalise on the stability and growth in the economy. Having said that, customer preferences both for brands and retail malls have been altered and today customers view retail malls not only as shopping centres but also as entertainment hubs and lifestyle destinations. Brands are also discerning about the location of their stores and are therefore choosing to align with retail malls that have higher footfalls and better conversion rates per footfall.”
Delhi – NCR emerged as the most active retail market for Q1 2018 with the completion of 2 new malls while no other city saw any new completion. The market also recorded the highest volume of leasing activities in the first quarter of 2018 with total absorptions in Delhi – NCR being close to 300,000 sq. ft.
Mumbai saw the closure of mall spaces measuring 850,000 sq. ft. in the city, contracting the available retail space, bringing down the vacancy to a manageable 10% in Q1 2018 as against 13% in Q1 2017.
Ramesh further added, “Landlords in India are actively adjusting tenant mixes and are placing greater emphasis on the experience of shopping. International brands have been entering the country and are expanding rapidly in the past couple of years, with more expected to look for quality space across the country. Some international brands like Kiabi, Mavi, Avva, Colin’s, Damat, Tudba Deri and Dufy are likely to enter the country in the next few months.”
In the past few months, private equity have taken increased interest in key leasehold retail assets across the country. A leasehold retail property usually has a higher probability of success as the developer is actively involved in the key functions of mall management, especially tenant management. Various new regulations like easing foreign investment for single-brand retailers, longer shopping hours and an updated framework for establishing real estate investment trusts (REITs) have attracted the attention of various private equity funds.
Your email address will not be published. Required fields are marked *
Save my name, email, and website in this browser for the next time I comment.
Sign me up for the newsletter!
Notify me of follow-up comments by email.
Notify me of new posts by email.
Wienerberger Announces Investment of INR 30 Crore in its Factory in Kunigal
New Tourism Foundation to Launch “New India: New Ladakh”
India’s largest kitchen appliance company TTK Prestige unveils 2020 plans
HDU Healthcare offers ICU Setup at home and a one-stop solution for all home healthcare services
CBSE Regional Science Exhibition concludes with huge response at Global Indian International School
2014 The Global Indian New Network (TGINN)