Rentals in shopping malls have come down by up to 30 per cent in the past couple of months as supply outstrips demand, but realty players doggedly refuse to acknowledge such a trend.
"In some locations they (rentals) have fallen up as much as 30 per cent. This is a major correction, which has happened in the sector," Reliance Retail President and Chief Executive (Life Style) Bijou Kurien said.
A variety of reasons are responsible for the fall in rentals, including additional supply and holding back of expansion plans by retailers in the face of rise in rates, he added.
Footwear and apparel major Woodland's General Manager (Sales and Marketing) Lokesh Mishra said high retail rentals had always been a worry as it constituted the biggest chunk of expenditure for any retailer, but fortunately rentals are going down after skyrocketing over the past two years.
"In the last two months, we have seen a drop of 15 per cent in the figure quoted by builders and realty people," he added.
Expressing the same sentiments, Hindustan Sanitaryware Vice President and Business Head D K Jairath said the rentals have softened and the company expects another 15-20 per cent fall over the next two quarters.
However, major real estate developers, who are running shopping malls across the country, do not agree with this view and said that they have not witnessed any correction in rentals and there is no dearth of demand for retail spaces.
