Growing vacancy rates are presenting challenges for shopping malls across India. Recent analyses indicate a concerning trend, with vacancy rates in shopping malls reaching approximately 30% in Delhi-NCR and around 25% in Mumbai.
The vacancy rate in shopping malls is increasing now.
Of the 255 shopping malls spread throughout India, reports suggest that over a third are facing significant vacancy issues. The downturn is not isolated to Mumbai and Delhi-NCR; major cities are also feeling the impact, although their vacancy rates might be comparatively lower.
In Chennai, the vacancy rate has doubled since 2011, climbing from 10% to 20%, fueled by the emergence of new shopping centers. Bangalore and Hyderabad are confronting their own challenges regarding vacancies, specifically in office spaces, with current rates hovering between 5% and 10%.
Experts suggest that the proliferation of new malls contributes to escalating vacancy rates. The consistent launch of new retail spaces exacerbates the existing problem.
Are shopping malls loosing their charm?
The consensus among industry observers points to a fundamental imbalance between demand and supply dynamics. Developers are constructing malls without adequately assessing current market demands. The situations in Noida and Gurgaon exemplify this issue, where a substantial number of shopping malls have been developed, potentially exceeding consumer needs.
Pranav Ansal, vice-chairman of Ansal API, remarked on this situation, stating that "built mall space is exceeding the demand." This oversupply provides retailers with increased negotiating power, enabling them to secure retail outlets at reduced rental costs.
Ansal also highlighted the importance of incorporating key features likemultiplexes and diverse food options to attract and retain customers. Recent data underscores the significance of comprehensive facilities, revealing higher foot traffic in malls offering superior amenities.
Shubhranshu Pani of Jones Lang LaSalle India emphasized the ongoing demand for shopping malls that prioritize enhanced amenities and facilities. He stated that malls with robust offerings experience little difficulty in attracting retailers.