Retail real estate market received a fresh mall supply of approximately 1.94 million sq. ft. in Q1 2012 (quarter ended March 2012), a report by Cushman & Wakefield India said.

Many of the expected mall projects were deferred on account of delay in construction, leading to a deficit of close to 50 per cent from the estimated supply (3.37 million sq. ft.) for the quarter.

This undelivered mall space is expected to get added to the supply for the next quarter which is estimated to be 4.25 million sq. ft. Of the eight major cities across India, Bangalore led the supply scenario with a total infusion of 1.2 million sq. ft.

Rental values

Rental values across most mall destinations within these cities remained largely stable, except for Ahmedabad, Bangalore and Hyderabad where mall rentals have seen a growth over the previous quarter in the range of 15-30 per cent.

Vastrapur in Ahmedabad recorded the highest growth in mall rentals at 33 per cent over last quarter mostly owing to renewals of existing tenants at a higher value.

High streets

In the same period, most high streets across major cities recorded significant increase in rental values, as against malls, reflecting the bent of interest among retailers for high street properties.

Mr Jaideep Wahi, Director, Retail Services, Cushman & Wakefield commented: “The first quarter of the year has been positive for the retail market and indeed over the last one year.

While, the mall space has been moving cautiously to ensure that demand to supply ratio remains stable to maintain rental values, high streets continue to see increased demand and interest from a range of retailers.

Approval for 100 per cent FDI in single brand outlet in India is a crucial step towards restructuring the retail scenario in India.

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