AHMEDABAD: Ahmedabad continues to languish when it comes to utilization of available retail space. The city witnessed the highest vacant space in malls during the first half of 2016, said a report by real estate consultant Cushman and Wakefield (C&W).
The city did not see any new supply of retail space during the period on account of lower demand from retailers and high vacancy in existing malls. Among the top eight cities across India, Ahmedabad had the highest 33% vacancy in malls followed by Delhi NCR and Pune with vacancy of 20% each. Malls in Mumbai and Bengaluru saw vacancy of 16% and 12% respectively .
“Unplanned and concentrated development of malls at select locations have led to oversupply of mall spaces in the city. These malls were therefore unable to attract sufficient footfalls to generate profitable revenues,” said Anshul Jain, managing director, India, C&W .
There is 4.3 million sq ft of space in various malls across the city, of which 33% is vacant. “Barring two or three big malls such as AlphaOne, others have problems with regard to the occupancy . Unplanned development and lack of globally accepted designs have further made attracting consumers and retailers difficult for malls in the city,” said Dipak Patel, president, Gujarat Institute of Housing and Estate Developers.
According to C&W , owing to low demand from retailers and high availability of spaces in the existing stock, mall developers have refrained from launching or adding new malls in the city. Apart from Ahmedabad, Chennai and Hyderabad too did not register new supply of retail space in the first half.
“Lack of proper planning and business model led to failure of many malls not just in Ahmedabad but in many parts of the country during the initial years. Developers have now realised that mall is not a real estate project but a retail industry. So earlier when they used to sell the developed retail space but now they lease the entire area and generate revenues through rentals, which is a global practice,” added a city-based real estate developer.
Credits ET Realty