Malls in south India are almost full. They have recorded lowest vacancy levels with Chennai at 1.2 per cent, Bangalore at 3.1 per cent and Hyderabad at 4.7 per cent as compared with 15 per cent in Pune and 24 per cent in the national capital region.
According to Cushman & Wakefield’s annual retail report, this is due to the fact that the southern cities witnessed relatively lower supply than anticipated.
Hyderabad witnessed the least growth in mall space at only 10 per cent of the initial projections, followed by Chennai (22 per cent) and Bangalore (27 per cent) in the south.
Bangalore witnessed around 340,000 sft of supply in 2008 across three malls, which is only about half the supply as compared with last year. All major main streets across the city witnessed corrections over the last year ranging from 1 per cent in Commercial Street to 28 per cent in Sampige Road (Malleswaram).
The upmarket Vittal Mallya Road too recorded a 15 per cent fall in rentals over the last 6 months. Mall rentals remained consistent over the last year.
Chennai was expected to see 3 malls this year, but the city finally witnessed 170,000 sft of mall supply in the form of a single mall. Vacancy levels in the city were estimated to be 1.4 per cent. Rentals across main streets continued to move downwards; Cathedral Road-RK Salai & Anna Nagar 2nd Avenue recorded an annual depreciation of 33 per cent, followed by Adyar Main Road with 28 per cent and Khadar Nawas Khan Road with 13 per cent over last year.
Mall rentals in the central business district and suburbs too witnessed a fall of 4 per cent and 23 per cent annually respectively. In the coming months, rentals across malls and main streets are likely to dip with the exception of the CBD region that is likely to stabilise, the report pointed out.
Hyderabad witnessed 200,000 sft of mall supply in 2008 as against nil last year, recording approximately 4.7 per cent vacancy. Of the projected 5 malls, only one mall was operational this year in the city.
Main street rentals in the city over the last year recorded a drop as Banjara Hills dipped 29 per cent and SP Road, MG Road and Himayatnagar 15 per cent, 13 per cent and 12 per cent respectively.
Mall rentals in Himayatnagar and Banjara Hills Road No 1 too showed a drop of 4 and 20 per cent annually, though NTR Gardens emerged as the exception recording a 27 per cent annual appreciation.
