After a lull for almost a year, the Ahmedabad retail market is set to witness some activity in 2011.
With the likes of Alpha One city centre and Acropolis Mall set to offer retail space in near future, industry sources estimate an addition of 700,000 sq ft of retail space being added in Ahmedabad this year.
While on one hand buoyancy seems to be returning in retail space in Ahmedabad in terms of supply, the same may not result in rise in rentals, say sources.
For instance, according to a report by Cushman and Wakefield, a real estate consulting firm, positive economic sentiments coupled with improvement in enquiries have stimulated Ahmedabad's retail market segment. "Many retailers are anticipating a further improvement in consumer spending and have started executing their expansion plans. As a result, the city recorded a rental growth of 7-11 per cent across most micro markets," the report stated.
With continued preference for established main streets in the city, areas like SG Highway and Satellite Road remained the most preferred main streets in Ahmedabad, with the latter witnessing the highest rental value growth of about 11 per cent in first quarter of 2011.
According to Cushman and Wakefield, The improved sentiments amongst retailers have stimulated construction activities in the city. Ahmedabad, which did not witness any new mall supply in 2010, is expected to record new mall supply of approximately 700,000 sq ft in the next six months.
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While many retailers are exploring opportunities for expansion in the city, most of them are cautious about footfalls and revenues. To sustain the positive sentiments, most developers are likely to refrain from any increase in rental values across malls and high streets.
"While there are positive signs of improvement in the retail scenario in Ahmedabad with fresh supply set to be added, footfalls will be an area of concern. In recent times, rentals and footfalls have been steady after much correction in the past. However, rentals will only increase when all spaces are utilised. With new projects coming up, it has to be seen how much of retail commitments in these malls are fulfilled and only then can a upward trend in rentals be gauged," said Shrenik Shah, chief executive officer of Ahmedabad-based Space Management, another real estate consulting firm.