Cash crunch fallout: 13 mall projects deferred in just 6 months

New Delhi: Three shopping malls becameoperational and 13 got deferred in the top eight cities of thecountry during the first six months of 2013 as developers areeither cautious or facing cash crunch, property consultantCushman & Wakefield said today.

“The top eight major cities witnessed a total mall supplyof 2.94 million square feet (3 malls) during the first half of2013 with over 64 per cent (13 malls) of the total expectedsupply deferred,” C&W said in a statement.

The national capital region (NCR) witnessed the defermentof five malls, followed by two in Pune, Hyderabad, Chennai andone each in Kolkata and Bangalore.

[caption id=“attachment_1129745” align=“alignleft” width=“380”]  “The top eight major cities witnessed a total mall supply of 2.94 million square feet (3 malls) during the first half of 2013 with over 64 per cent (13 malls) of the total expected supply deferred,” C&W said in a statement.
AFP[/caption]

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“There is considerable demand for quality retail spaces inboth shopping malls as well as main streets in most cities.“However retailers, though optimistic about theirexpansion plans, are showing caution prior to launching newstores, which has resulted in the deferment of malls whereoccupancies have been low and where developers have faced someliquidity issues,” C&W Executive Managing Director (SouthAsia) Sanjay Dutt said.

The malls now prefer to open with near full occupancy, aswas seen in some recent cases, he added.“This trend of mall deferment across can be attributed toa number of reasons. Primarily, developers are facingliquidity issues to complete the construction of their malls,”

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the statement said.Moreover, retailers are cautious in opening new stores andare carrying out comprehensive due diligences to understandtheir market before making commitments.

“Developers are not in a position to launch their mallsuntil they get sizeable occupancy that can support theoperations of the mall,” C&W said.

The consultant noted that Hyderabad’s AS Rao Nagar mainstreet recorded maximum rise in rentals (33 percent) overlast quarter, followed by main streets of Punjagutta (29 percent), Ameerpet (19 per cent) and Kukatpally (17 percent).Hyderabad’s Raj Bhavan Road/Somajiguda (-14 per cent) andAbids(-12 per cent) main streets witnessed sharpest fall inrentals, followed by Koregaon Park in Pune (-10 percent).

Malls in Mumbai’s Vashi registered sharpest rentalappreciation of 18 percent. Malls in Pune’s Bund Garden Road/Koregaon Park and Hyderabad’s NTR Gardens witnessed sharpestdrop of 17 percent in rentals.

PTI