Recent surveys indicate that the overall vacancy rates in shopping malls have declined by 0.5 percent, now resting at 15.01 percent. This positive change is attributed to sustained leasing activities, even as only 0.79 million square feet (msf) of new space was introduced in cities like Kolkata and Pune.
Interestingly, transaction activities contributed significantly to the reduction of mall vacancies in both Pune and Kolkata, notwithstanding the emergence of additional shopping space. In Pune, a new mall opened with a massive area of 800,000 square feet, while Kolkata saw the partial launch of a mall, which currently has only anchor stores operational over a mere 60,000 square feet.
Furthermore, intensified leasing efforts and minimal increases in new mall space supply contributed to a 2 percent decrease in Bengaluru's mall vacancy rates. Slight reductions were also observed in Chennai and Ahmedabad. In contrast, areas like Mumbai and the National Capital Region (NCR) experienced marginal increases in vacancy levels across various malls.
Looking ahead to the second quarter of 2013, expectations are set for the operation of nine malls by the third quarter within the fiscal year. However, Bengaluru faced setbacks, with one mall's launch postponed due to construction delays, while another has been put on hold due to liquidity concerns.
In Chennai, one of the two planned malls has been delayed until early next quarter due to construction holdups, with the second mall's timetable slipping as it faces low retailer demand. Moreover, a proposed 225,000 square foot mall in the NCR has been pushed back to later quarters, attributed to delays in securing essential approvals.
Additionally, internal reconstruction efforts in a mall along Mysore road have resulted in a 13 percent drop in rental prices, while a significant 8 percent decline has been noted in Pune driven by oversaturation of mall spaces. However, main streets like South Ex I & II in NCR and Connaught Place have reported rental hikes of 4-5 percent, fueled by new transactions pushing for higher price points.