India adds 1.94 million sq ft of new mall space in Jan-March quarter

NEW DELHI: India received fresh mall supply of around 1.94 million sq ft in the quarter ended March 2012, says a new report on the retail real estate market by Cushman & Wakefield India.

Many mall projects did not come online due to delays in construction, leading to a deficit of around 50% from the estimated supply of 3.37 million sq ft for the quarter.

This space will now come into the market in the next quarter, which is expected to see a supply of 4.25 million sq ft of new space.

"The first quarter of the year has been positive for the retail market. While, mall space has been moving cautiously to ensure that the demand supply ratio remains stable to maintain rental values, high streets continue to see increased demand and interest from a range of retailers," says Jaideep Wahi, director, retail services at Cushman & Wakefield.

Of the eight major cities across India, Bangalore led the supply with 1.2 million sq ft of new space coming in this quarter. Rental values across most mall destinations across these cities remained largely stable, except for Ahmedabad, Bangalore and Hyderabad where mall rentals have seen a growth of 15-30% over the previous quarter.

In the same period, most high streets across major cities saw significant increase in rents compared to malls, reflecting the interest among retailers for high street properties.