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Hit by high rentals and low footfalls, one-third of retailers at shopping malls in large cities like Mumbai, Delhi-NCR, Chennai, Bangalore and Kolkata are shifting to tier-II & III cities, according to an Assocham survey.
The survey found that around 300 to 350 malls came up in the country over the last two years. However, a staggering 75 to 80 per cent of these malls lie vacant, even as 95 malls were forced to shut down.
Retailer tenants at malls are switching over to smaller cities such as Nagpur, Jaipur, Pune, Indore, Lucknow, Ludhiana and Chandigarh as they promise better returns, the survey pointed out.
“The core benefits for the retailer tenants to move to smaller cities are lower operational costs and comparatively lesser competition,” Assocham President Rana Kapoor said.
Other smaller cities where mall-based retailers are moving include, Kochi, Vijayawada, Visakhapatnam, Mysore, Coimbatore, Thiruvananthapuram, Guwahati, Ahmedabad and Surat as they hold higher growth potential, the survey said.
“One of the main reasons for the high rentals in the big city malls is the exorbitant land prices and high development costs. Thus, in the foreseeable future, making such malls profitable ventures will remain a challenge,” Kapoor said.
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