A'bad mall vacancy drops marginally in Q2 of 2013

Cushman & Wakefield's latest retail report says the city's overall mall vacancy declined by 4.8% for the said period year-on-year

With only a few new retailers opening up shop in the city, mall vacancies dipped only marginally in Ahmedabad for the second quarter of 2013.

According to Cushman & Wakefield's latest retail report, the city's overall mall vacancy declined by 4.8 per cent for the said period year-on-year (Y-o-Y).

In Ahmedabad, mall and main street rentals remained stable due to low transaction activity. Limited options for quality retail spaces in C.G. Road, Law Garden, Prahladnagar and Satellite Road main streets have resulted in low transaction activity during the quarter.

"Retailers continue to prefer main street locations for expanding their operations. Good quality malls have been operating at lower vacancy levels, thus retailers are left with fewer quality options to choose from. This has also resulted in lower transactions, keeping the mall rentals stable across all micro-markets. The city's overall mall vacancy declined by 4.8 percentage points and was recorded at 29.2% at the end of the quarter with a few retailers taking up space in malls along the S.G. Highway," the report stated.

According to developers, while retailers are choosy about spaces, lack of premium spaces at malls also resulted in vacancy barely dropping in Ahmedabad.

"Premium spaces won't remain vacant at malls. However, there are some spaces at malls which retailers do not want to occupy. Since as a mall, it is difficulty to maintain a 100 per cent vacancy, the levels didn't drop much," said Jateen Gupta, managing director of JP ISCON that runs the ISCON Mega Mall on SG Highway. Among such vacant spaces are those that lack visibility or are situated on the corners.

However, Gupta added that enquiries have been pouring in sporadically, especially from apparel and food & beverage (F&B) segments.

"There is considerable demand for quality retail spaces in both shopping malls as well as main streets in most cities. However retailers, though optimistic about their expansion plans are showing caution prior to launching new stores, which has resulted in the deferment of malls where occupancies have been low and where developers have faced some liquidity issues. Malls now prefer to open with near full occupancy, as was seen in some recent cases. Despite a few malls being deferred during H1 2013, some new malls may be opened before the end of the year making way for more quality options for international and national retailers," said Sanjay Dutt, Executive Managing Director, South Asia Cushman & Wakefield.

As per the report, retailers are now exploring possible retail space options on the S.G.Highway, propelled by the easy access to residential hotspots. However, enquiries for main street retail spaces remained healthy, especially from the F&B and apparel segments.