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For the first time in India’s mall history, a net negative supply of retail space was observed in 2016 due to the closure of some failed malls coupled with limited new supply.
While five malls shut down last year, 10 others changed their usage to offices, educational institutes, shopping clusters, hospitals and banquet halls – resulting in ~3.5 mn sft of retail space (across 15 malls across India) getting withdrawn from the operational stock.
According to Pankaj Renjhen, MD Retail Services, JLLIndia, these malls were operational in Chennai, Delhi-NCR, Mumbai and Pune. It is not the first time that a withdrawal of mall space has been done, but the quantum this time around was far higher than in all previous withdrawals (1Q2010–4Q2015) put together.
This is in large part due to the long continuing bipolar dichotomy in the Indian retail sector starting to reach its end. Therefore, a few more malls are expected to meet a similar fate in the next few years.
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