No over supply of malls

Only 77 of the 300 centres estimated will materialise

Contrary to the estimates that 300 malls would be coming up in India by 2006, there are only 77 mall projects that are under construction or on the drawing board in the six metro cities of India.

Fifty eight others projects in Tier-II cities will ultimately see the light of the day.

"There is no over supply for the retail mall space in the country though the demand still exists for mall projects", real estate firm Chesterton Meghraj's managing director Anuj Puri said.

According to a study conducted by them, out of the 77 malls coming up in the six metro cities, 20 are nearing completion, 31 will be ready by 2005 whilst 26 are to be ready by 2006.

"Of the 20 new malls, over 72 per cent of space has already been pre-leased to anchor (major retaining entities) and smaller vanilla retailers", the study said.

For malls which will be operational next year, anchor area of over 48 per cent of the total mall has been pre-leased and for those malls which will be operational a year later, 32 per cent of the total area has been pre-leased by the anchors.

The study said "whilst the market as of today is still afresh, with only a handful of malls operational, we don't believe that up to 2006 there will be much wider variety of choice for real estate for retailers".

Interestingly, out of 77 malls in the serious construction stage, Delhi would be adding 31 by 2006 with 77.32 lakh sq ft while Mumbai will add 21 with over 54 lakh sq ft space.

According to retail industry experts, the organised retail trade in India was estimated to grow at the rate of 8.5 per cent per annum for the next 15-20 years.

The share of organised retail segment is projected to be at 20 per cent of total retail trade by 2010, which would be valued a Rs 280,000 crore "" a 15 fold growth over the size in 2002.

The malls, which continue to have a negligible 2.3 per cent share of total organised retail trade, would be insufficient for the existing retailer's growth despite opening up of foreign direct investment (FDI) in retail and allowance for foreign retailers to operate in India.