The construction of four new malls in 2012 in Bangalore, constituting 1.86 million square feet, has impacted mall rentals.
The new malls are coming up in Whitefield, Old Madras Road (OMR), Malleshwaram-Rajaji Nagar and MG Road.
“The vacancy levels have risen by 2 per cent primarily due to the influx of large amount of mall space. The city witnessed significant variations in rental values during the year (2012),” said Jaideep Wahi, Director, Retail Agency, Cushman and Wakefield India.
Along with new mall space, poor quality mall space has impacted the city retail space. “There have been no takers for poor quality malls and this has led to dip in rentals by 43 per cent over the last year in Cunningham Road micro market as was the case in Mysore Road micro market and Rajarajeshwarinagar, which recorded a dip of 13 per cent and 25 per cent respectively,” said Wahi.
Existing oversupply of mall spaces coupled with fresh supply caused mall rental drop of 20 per cent over the year in Whitefield as well.
On the other hand, main streets of Vittal Mallya Road and Indiranagar 100 Feet Road witnessed an increase of 58 per cent, the highest in India and 18 per cent respectively over the year on account of lack of quality space and high demand from retailers wishing to have presence in these locations.
Jayanagar 4th Block, 11th Main Street recorded year-on-year increase of 32 per cent, mostly due to demand from retailers wishing to capitalise on the surrounding residential catchment area.
Upcoming infrastructure negatively affected the main street of Brigade Road, pulling down the rentals by 25 per cent over the last year.
Supply deferred
Wahi quoting the Cushman & Wakefield’s latest retail report said the top eight major cities witnessed a total mall supply of 3.44 million sq ft during 2012. Over 58 per cent (4.8 million sq ft) of the total expected supply has been deferred. The highest deferment of supply was recorded in Mumbai and Hyderabad where none of the planned supply entered the market, followed by Chennai (87 per cent) and NCR (75 per cent).