With the Ahmedabad's latest mall frenzy area Vastrapur registering a whopping 60 per cent rise in rental values in 2012, developers and experts expect a surge in mall supply for the next year 2013.
For instance, according to Rajesh Vaswani, executive director, Venus Infrastructure & Developers Ltd. and Neeraj Tomar, head - Ahmedabad office, Jones Lang LaSalle India (JLL), the city could witness over one million sq ft supply of main street and mall retail buoyed by the rise in rental values.
According to real estate consulting firm, Cushman & Wakefield's latest retail report, Ahmedabad's micro market of Vastrapur saw highest increase of 60 per cent at Rs 120 per sq ft per month in mall rentals over last year. Ahmedabad also witnessed the highest average mall rental increase of 23 per cent over last year, resulting in the sharpest fall in mall vacancy levels of -7 per cent.
"Established retailers are scouting for quality retail spaces, be it malls or main streets. Quality has been a key concern for most retailer especially international brands. Good connectivity to large catchment areas with ample infrastructural support is the pre-requisite for retail spaces in malls and main streets of any locality to attract the retailers and command good rentals. An expected 12 million sq ft of new mall space is expected in 2013 which will be a mix of deferred spaces as well as new projects," said Jaideep Wahi, director, retail agency, Cushman & Wakefield India while elaborating the report.
The Vastrapur area of Ahmedabad got a boost in main street and mall retail post the opening and functioning of Alpha G:Corp's over one million sq ft 'AlphaOne' mall. Spread across a total development area of over 1.2 million square feet, AlphaOne Ahmedabad houses some of the biggest brands in retail and entertainment in the country including Lifestyle, Cinepolis, Shoppers Stop, and HyperCity, among others.
Talking further about the stipulated supply, Tomar said, "There has been a dearth of quality malls in the city. Going forward, at least one million sq ft of supply is expected to be seen in the mall space. However, retailers could also look at the revenue sharing model in near future."
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As per the report, though Ahmedabad continued to see high mall vacancy levels of 33 per cent, increased leasing activity resulted in a drop of 7 per cent in the mall vacancy levels. "To pitch against AlphaOne, one would definitely have to go for at least one million sq ft. The supply had been slow but steadily growing," Vaswani added.
Meanwhile, the report stated that other mall micro markets recorded moderate year on year rental growth of 7-9 per cent. SG Highway's main street rentals experienced moderate rise of 6 per cent while rentals in the main streets of Law Garden remained stable. However, owing to high preference for main street retail spaces and low availability of quality spaces, main streets of CG Road and Satellite Road experienced high rental growth of 15-20 per cent over the year.