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Posted at: Jan 7, 2017, 12:48 AM; last updated: Jan 7, 2017, 12:48 AM (IST)

Mall supply to gain momentum in 2017

Fast facts

  • 11 MSF new malls expected in 2017
  • New mall supply of 5.3 MSF in 2016
  • Mall supply in 2016 highest in 5 years at approximately 5.3 msf
  • Delhi-ncr accounted for the highest supply during 2016, followed by mumbai and pune
Mall supply to gain momentum in 2017
The current pipeline of mall supply for 2017 looks strong with approximately 11 msf of mall supply expected to become operational across the eight cities. According to international property consultants Cushman & Wakefield Hyderabad, which is among the least-penetrated markets, will likely witness the highest supply of malls during the year. Spanning 2.6 msf, eight malls are likely to become operational in Hyderabad during 2017. While these malls would be spread across the city, majority of the malls would be seen in the north-west quadrant in locations such as Kondapur, Gachibowli and Chandanagar.

Chennai is likely to witness the first bout of significant supply since 2013. It will see the supply of 2.5 msf during 2017 spanning across five malls. 

Mumbai, which has seen a sluggish supply of malls over the past few years, is also expected to see supply of 2.3 msf across three malls. A mall each is expected to come up in Navi Mumbai, Mulund and Bandra-Kurla Complex during the year catering to different parts of the city. Bengaluru, too, is likely to witness a frenzied supply with 2.0 msf of mall space expected to become operational during the year across five malls spread across submarkets such as Whitefield, Vijaynagar, Yelahanka, Bannerghatta Road and Koramangala.

Commenting on the growth in retail sector Anshul Jain, Managing Director, India, Cushman & Wakefield said, “Retail mall spaces have, in recent times, seen interest from institutional investors which is providing an additional boost to developers to take up retail malls space building. Further, once India also starts listing REITs, quality retail spaces will be seen as a viable mid to long term investment asset for investors. This has further enhanced the attractiveness of retail mall spaces for developers. This is perhaps the reason why 2017 is expected to see nearly double the amount of retail space as against 2016.” 

The year 2016 was one of the best years for the organised retail sector with supply of new malls touching a five-year high of 5.3 million square feet (msf) across the top eight cities during the year. According to international property consultants Cushman & Wakefield the highest supply of malls was noted in Delhi-NCR with over 3.1 msf of new mall supply. Mumbai with .9 msf and Pune with 0.8 msf were the next in line. 

Stable economic conditions and growth along with changes in disposable incomes, have led to larger per head spending in the last few years. This led to retailers targeting these cities for their presence, thus spiralling demand for retail space.

Owing to the completion of the ‘Mall of India’, which is one of the largest malls in India, Delhi NCR accounted for almost 60 per cent of the share in new supply during the year. Pune witnessed three malls becoming operational, spanning a total of 0.8 msf during the year. 

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