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HOME INDUSTRY FIRST PUBLISHED: WED, FEB 05 2014. 12 11 AM IST

Delhi has highest vacancy rate among emerging Asian

cities
Chennai, Bangalore, Kolkata and Hyderabad too had high rates, featuring in the top 10 of 16 cities surveyed
Sapna Agarwal | Mihir Dalal

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Delhi NCR had the highest vacancy rate in malls at close to 25%, followed by Mumbai and Pune at nearly
uproar over Telangana
20% each, according to the report. Photo: Priyanka Parashar/Mint

Mumbai/Bangalore: Retail spaces, including shopping malls, in the National Capital Region
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(NCR) of Delhi, Mumbai and Pune have the highest vacancy rates among cities in emerging

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Asia, according to a new report.
These cities witnessed considerable build-up of retail stock during the past 6-7 years on the
back of high economic growth and the large influx of investment into retail, said the report by
Jones Lang LaSalle (JLL) to be released on Wednesday at the Retail Leadership Summit in
Mumbai.
Thereafter, as economic activity slowed during 2011-13, major portion of these mall spaces
remained vacant due to lack of interest from retailers, the report on retail realty in India said.
Delhi NCR had the highest vacancy rate in malls at close to 25%, followed by Mumbai and Pune
at nearly 20% each, according to the report.
Chennai, Bangalore, Kolkata and
Hyderabad all had a high vacancy
rate, featuring in the top 10 of 16
cities surveyed in the report.
The report studied cities from six
emerging economies based on their
size, city characteristics, retail
characteristics and retail growth
potential. According to the World
Atlas city population statistics, these
16 cities accounted for slightly over
6% of the total combined population of their countries.
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Indian tier I cities quote a higher rent for prime city locations compared to other emerging Asian
cities. Prime city locations in India offer few options for retailers because while there is little mall
space available, these areas have a higher concentration of high-net-worth individuals.
Another reason for high rents is the lack of quality mall space. At the same time, Indian tier II
cities offer attractive rentals to retailers compared to other cities in emerging Asian economies.
A lot of developers are ambitious and there are a lot many malls coming up but some of these
usually fail as they are low quality, said Jacob John, brand head at Louis Philippe , owned by
Madura Fashion and Lifestyle, a division of Aditya Birla Nuvo Ltd.
Malls that sell space outright have a higher rate of vacancy than those that lease out spaces
and have them professionally managed. According to the report, more than 75% of malls on
sale have medium and high vacancy levels. Of the overall retail space in India, 47% of it is sold
outright, whereas 53% is managed professionally.
The percentage of professionally managed malls is increasing, said the report.
To be sure, malls like Inorbit and Phoenix Market City in Mumbai have few vacancy problems
and have even been able to increase rents. If you run your mall well, youre looking at an
increase in rentals of 7.5-10% per annum, conservatively, said Kishore Bhatija, chief executive
officer (CEO), Inorbit Malls India Pvt. Ltd.
Mumbai, Delhi NCR, Chennai, Kolkata, Bangalore, Pune and Hyderabad account for over 70%
of the countrys total retail stock, said the report.
The top eight markets account for 70% of our revenues, said Sandeep Tarkas, president,
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customer strategy, and CEO Future Media and T24 mobile at Future Group. The group includes
Future Retail Ltd and Future Lifestyle Fashions Ltd which operate retail chains such as Big
Bazaar and Food Bazaar in 72 cities.
Future Group, led by Kishore Biyani, Indias largest listed retailer, is planning to enter new cities
that are cheaper than the top 20, said Tarkas.
Khopoli, a small town in Maharashtra, will get its first mall later this year and brands such as
Zara opened in Surat in May last year. Premium brands are looking at emerging cities and if
there is a good project they are willing to sign up, said Anupam Yog, director marketing,
Virtuous Retail Services Pvt. Ltd which launched its first mall in Surat in May last year and has
already got 80% occupancy.
Sanjay Prabhu, CEO, Mustard India, a real estate and mall management consultant focusing on
tier III and IV cities, said his company has found brands that are ready to expand to small towns
in well-designed and -managed projects. There is a dearth of quality projects, he said.
The limited availability of quality real estate is restricting retailers from growing organically. For
instance, Reliance Brands is going to open just 25 new stores in 2014 compared to 45 last
year, said Darshan Mehta, CEO, Reliance Brands Ltd which has a portfolio of 13 brands such
as Zegna , Diesel, Kenneth Cole and Steve Madden. There is not much organic growth
happening as there is lack of new quality malls coming up, said Mehta, adding he may have
opened more stores if he had found the right spaces.
Our biggest challenge is locationeven in top metros such as Mumbai and Delhi, said Tarkas.
From Bandra to Andheri (in Mumbai) we dont have anything besides one Food Bazaar.
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 Himalaya plans expanding Likewise, there are very few in the heart of Delhi as compared to the periphery of the city where
reach to 1 mn outlets via
kirana route
there is more mall development taking place, said Tarkas.

Tw eet 23
First Published: Wed, Feb 05 2014. 12 11 AM IST 21

RETAIL SPACE SHOPPING MALLS DELHI MUMBAI PUNE

MORE TOPICS: RETAIL SPACE | SHOPPING MALLS | DELHI | MUMBAI | PUNE |

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 Karan Rajpal 5 days ago
Very interesting that Malaysia, one of the major APAC markets, doesn't feature in the survey.
Reply Share

rohit makan 5 days ago

ye i agree with comments of sagar.sheila dixit has given many job opportunities to youth in 15 years.and kejriwal is
taking the credit of her work
Reply Share

sagar mishra 5 days ago

because shela dixit established so many fctories industries in delhi.in the recent past
Reply Share

amit sharma 5 days ago

this is happened because the congress and sheila diaxit had done work for the employement.they established a
department for that whole credit goes to sheila dixit
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 5 comments 15 hours ago 2 comments 18 hours ago
umesh Advani is best for the politics. But BJP party Tarun "Contrary to popular perception, the countrys
want now he has lost their sense power, activeness, economic reforms were not launched in 1991. This is
confidence and accuracy. That's why the typically lazy, revisionist

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