Retailers renewing leases in malls in tier 2 cities such as Ahmadabad are having to deal with 15% increase in rentals. This is in view of increase in demand from such brands as FCUK, Accessorize, Nautica, Tommy Hilfiger opting to locate in malls, instead of the high street.
After a low of two years, developers are finally able fill up the retail space. Ahmadabad based developer JP Iscon, operating one of the largest malls in Gujarat, reportedly has 95% occupancy, and is having to turn away retailers.
This shift is because large format food and grocery retailers are occupying large spaces inside malls.
Another factor contributing to the boosted buzz in malls is the imminent FDI in multi brand retail policy that is already being discussed in the Parliament.
As per a recent report by Cushman & Wakefield (C&W), between April-June 2011, 27.5 lakh sqft of mall space has been made available across India by mall developers. This is 65% more space than was available in the previous quarter ending March 30, 2011.
Pune recorded a supply of 12 lakh sqft of fresh mall space in the last quarter, which is the highest in the country. Bangalore and Chennai jointly added 7 lakh sqft of mall space, while Mumbai received 8.5 lakh sqft of mall space.
Ahemdab will receive 12 lakh sqft of fresh mall space by September, with the huge Alpha G Corpís mall completing construction. With so much retail space on the anvil, market analysts see a cooling in the rentals in the near future.
Real experts believe that with the huge quantum of mall space expected to become operational in the third quarter of 2011, mall rentals in the city are expected to come under severe pressure.