India will have 280 malls by 2012, says report

The Indian retail sector will continue to expand at a fast clip, with the number of malls in the country likely to swell to 280 in 2011-12 from 190 at present, a global real estate services firm has said.

"India has added around 5 million sq ft of retail space in 2010 and approximately 15 million sq ft of space is lined up to get operational in 2011-2012," CB Richard Ellis said.

While the National Capital Region (NCR) has significant vacant retail space, another 4 million sq ft is lined up for development in 2011-12 in Delhi and its suburbs.

Mumbai, the NCR and Bangalore will lead the rest of the country in terms of retail space development, accounting for almost 70 per cent of the total area developed around the country in 2011-12, it said.

Rents have depreciated by 30-40 per cent on average across cities and have relatively headed toward stability post-correction in 2008, according to CBRE.

There is no dearth of demand for retail spaces on rent at current rent levels, which the firm said would lead retailers to hire properties at the corrected rental levels.

The real estate services firm said around 3 million sq ft of mall space is expected to be ready in 2011 in Mumbai, with R-City Centre II in Ghatkopar, Market City in Kurla and Nirmal Lifestyle II in Eastern suburbs expected to open for business.

"Rental values have been increasing across all high-street destinations and better-performing mall properties (largely Linking Road, South and Central Mumbai), fuelled by active retailer interest in opening shops in these locations," it said.

At present, Mumbai has around 7 million sq ft of retail mall space in South and Central Mumbai and the Western and Eastern suburbs, coupled with around 4 million sq ft of high-street space concentrated in Linking Road, the Colaba Causeway and Kemps Corner.

CB Richard Ellis South Asia Chairman and Managing Director Anshuman Magazine said the overall real estate performance of the country has been on an upward trend, with increasing transaction volumes.

"In the coming year, prices will witness an upward trend in commercial and retail rentals in the CBD (Central Business Districts) and prime city districts. The suburbs, however, will witness marginal appreciation, or stability in prices," he said.