Chennai accounted for over 49% of mall space absorption in first half of 2018

CHENNAI: Chennai accounted for more than 49% of mall space absorption in the country in the first half of 2018. Out of about two million sqft space absorbed in malls in seven major cities, Chennai’s share was 9.57 lakh sqft. Hyderabad with 3.58 lakh sqft and Delhi with 3.25 lakh sqft followed suit, said a report released by JLL India on Wednesday.

Chennai is expected to add another 5.1 lakh sqft of mall space in the next six months.During this period, Delhi will add about 7.15 lakh sqft and Bengaluru 5 lakh sqft, said JLL India CEO Ramesh Nair.
The total net mall absorption in the major markets in the first half of 2018 was 19.45 lakh sqft. This is a 75% yearon-year growth compared to the corresponding period last year. Meanwhile, new completions saw a 25% yearon-year decline between H1 2017 and H1 2018. As against 2.88 million sqft of new completions in H1 2017, only about 2.14 million sqft was completed in the first half of this year. Chennai, with 46%, topped in new completions too. However, with robust leasing, the reduced supply would help the rentals remain stable and firm up over a period of time, the report said. Pune is the only market which will not see any new addition of retail mall space in 2018.
Both international and domestic brands are active in leasing. There is also a renewed interest in investment in retail market, the report said.
“The trends of retail supply and absorption are linked as malls usually are reticent in starting operations without complete or near complete absorption of malls. Only in very limited cases, do malls start with noticeable vacancies,” the report said.
“The retail scenario in India has started to show signs of maturity now, by concentrating on malls that will have longevity, sustainable business and have scope of refurbishment and renovations in the future,”said Nair.
“As the Indian consumer becomes more discerning, the physical asset surrounding retail has become important in creating the right experience. Therefore, developer companies are now creating retail destinations rather than mere shopping centres. In the next few years, we will see a concentration of large format malls that will allow shoppers a variety of experience beyond purchase,” he added.