Reported Fall Of Mall Supply By 54% In 2008 (India)

According to a report by Cushman and Wakefield (real estate consultants), mall supply fell by over 50% in 2008 despite earlier projections, with as much as 11 million square ft of unexpected supply deferred to the next two years. Earlier projections were expecting 74 new malls at the beginning of 2008, with only 34 delivered throughout the year.

Malls in the nation’s capital region of India, recorded a very high vacancy rate of 24%, however, malls in South India recorded lowest vacancy levels, with Chennai at 1.2%, Bangalore at 3.1% and Hyderabad at 4.7%.

According to the same report, despite 2008’s mall supply shortfall, vacancy rates have remained amazingly high at a national average of 10%. This is primarily due to the fact of uneven distribution of mall space in major cities, where mall supply has been confined to single districts targeting similar audience profiles.

Cities such as Pune and Delhi are areas where distribution of malls is fairly equitable with high vacancy levels as a result of inadequate quality of development which have discouraged major retailers from venturing into these malls. From a retailer’s point of view, the preference has still been largely for ‘premium high streets’ over malls however, the three south Indian cities witnessed drastically lower vacancy levels due to relatively lower supply than anticipated.