Net leasing of retail space in shopping malls increased by 69 per cent during January-March in seven major cities to 3.52 lakh sq ft as domestic and global brands looking to expand their presence, according to property consultant JLL India.
Supply of space in malls, however, fell by 87 per cent during the first quarter of 2018 calendar year in the seven cities -- Mumbai, Delhi, Bangalore, Chennai, Hyderabad, Kolkata and Pune -- to 1.6 lakh sq ft over a year-ago period.
"Retail mall absorption recorded a positive trend in Q1 2018 (January-March). Total absorption across top 7 cities of India was recorded at 3,52,000 square feet (sq ft), recording a rise of 69 per cent over the same time last year," JLL said in a report.
The supply side of the market recorded an addition of only 1,60,000 sq ft of fresh mall supply by adding just 2 new shopping malls in DelhiNCR, it added.
According to the data, the Delhi-NCR market accounted for 84 per cent of total leasing of retail space in malls at 2.92 lakh sq ft. The other markets that saw some decent absorptions were Hyderabad (31,000 sq ft) and Chennai (17,000 sq ft).
"The increased pace of leasing activities is heartening as it signals towards a growth phase for retail in India. Brands, both national and global, are looking at increasing their presence in key markets, to capitalise on the stability and growth in the economy," said Ramesh Nair, CEO and Country Head, JLL India.
Nair said the customers today view retail malls not only as shopping centres but also as entertainment hubs and lifestyle destinations.
"Brands are also discerning about the location of their stores and are therefore choosing to align with retail malls that have higher footfalls and better conversion rates per footfall," he added.
Stating that global brands have been entering the country and are expanding rapidly in the past couple of years, Nair said some international brands like Kiabi, Mavi, Avva, Colin's, Damat, Tudba Deri and Dufy are likely to enter the country in the next few months.
The vacancy levels across mall spaces remained stable across most markets with the exception of DelhiNCR (18 per cent), Hyderabad (11 per cent) and Chennai (7 per cent) that saw marginal decline over past quarter.
DelhiNCR emerged as the most active retail market for Q1 2018 with the completion of two new malls, while no other city saw any new completion. The NCR market witnessed a withdrawal of close to 1 million sq ft of mall space, bringing down the total retail space stock by one per cent to 74.5 million sq ft from the previous 75.6 million sq ft.
"The malls that close are typically those which were constructed many years back and did not go through periodic modifications to suit changing requirements of retailers and shoppers," the report said.
Mumbai, too, saw the closure of mall spaces measuring 8,50,000 sq ft in the city, contracting the available retail space and bringing down the vacancy to a manageable 10 per cent in Q1 2018 as against 13 per cent in Q1 2017.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)