Mall vacancies in the southern cities of Chennai, Bangalore and Hyderabad increased seven per cent in June 2009 from 2.77 per cent in January this year, according to a recent report published by Cushman & Wakefield.
Hyderabad witnessed the largest infusion of mall supply, around 450,000 sft, followed by Bangalore that saw an addition of 300,000 sft of fresh mall supply, said the real estate research firm.
Vacancies in Bangalore almost doubled to six per cent, while in Hyderabad it was 17 per cent in June compared with five per cent in January. Chennai remained fairly same as last quarter with the expected supply being deferred to the year end.
Jaideep Wahi, associate director - Agency, Retail Services, Cushman & Wakefield, said the expected supply for malls had been greatly reduced since the beginning of the year owing to reasons such as slowdown in construction and in certain cases complete withdrawal of projects. “We are likely to see further corrections going forward as a result of renegotiations. Retailers are looking at changing their business understanding with upcoming malls into a revenue share or minimum guarantee model as an alternate to fixed rental model as previously employed,” he added
In the case of rentals, Bangalore remained under pressure with most of the locations registering correction in the range of 5-10 per cent of which the highest of 10 per cent was recorded at Magrath Road. Retailers preference was in the main streets which was demonstrated by a rise in rental values in Brigade Road (17%), Commercial Street (11%) while MG Road held steady.
In Hyderabad, rents appreciated by eight per cent at Banjara Hill. The other major mall locations – NTR Gardens and Himayathnagar — remained stable.
On the other hand, Chennai’s main street market remained stable with most micro markets maintaining status quo.
