Supply of new retail space in shopping malls remained negligible in six major cities this year till June due to construction delays but the second half is likely to witness addition of 6 million sq ft, according to property consultant CBRE.
"New retail space addition remained negligible during the first six months of this year. Most prominent shopping centre projects that were expected to reach completion during the period were deferred to the second half of the year, largely due to construction delays," CBRE said in a statement.
It said however that the second half of 2015 is likely to witness fresh supply to the tune of 6 million sq ft in the Delhi-National Capital Region (NCR), Bangalore, Pune, Hyderabad, Mumbai and Kolkata.
More than 60 per cent of this fresh mall space anticipated in the July-December period is expected to come up in the NCR, which is likely to witness the completion of key shopping centre developments.
According to CBRE's India Retail Market View for the first half of 2015, global as well as domestic Food and Beverage (F&B) retailers, followed by value retailing, remained the key demand drivers for store space.
As a consequence of the deferred supply of fresh mall space during the first two quarters, there has been a rising demand for retail space across high streets of leading cities such as Mumbai, NCR and Bangalore.
The lack of quality space has also given more bargaining flexibility to popular shopping centres, leading to the emergence of the performance guarantee model-wherein brands are required to guarantee a certain amount of business to the mall developer.
CBRE South Asia Chairman and Managing Director Anshuman Magazine said: "Since the addition of fresh shopping centre space is expected to remain sporadic and unlikely to accommodate the real estate plans of most brands, high streets will attract the spill over demand from retailers in forthcoming months.
"Online shopping trends, meanwhile, are fast catching up with traditional shopping methods on the back of an increasing number of e-Commerce platforms," he added.
