Construction delays shrink retail space in shopping malls, dips 79% in 2014

New Delhi: The supply of retail space in shopping malls last year fell sharply by 79 percent to about a million sq ft in the seven major cities of the country due to construction delays, property consultant CBRE said today. The supply of organised retail space stood at 4.7 million sq ft in 2013 in the seven cities – Delhi-NCR, Mumbai, Kolkata, Chennai, Bangalore, Hyderabad and Pune. [caption id=“attachment_2055573” align=“alignleft” width=“380”]  A shopping mall. AFP[/caption] “New supply addition for the entire year remained sluggish, with just about a million square feet of organised shopping space across Bangalore and Chennai becoming operational,” CBRE South Asia CMD Anshuman Magazine said. A significant number of prominent retail projects were not completed till 2015 as projected earlier, mainly due to construction delays, he said. CBRE noted that a number of shopping centres in Delhi NCR, Hyderabad, Bangalore and other prominent cities were expected to be completed by 2014-end but they were delayed further. A slowdown in the real estate sector has affected the cash-flow of developers, leading to huge delays in completion of housing and commercial projects. According to CBRE, prominent global as well as domestic players - such as Starbucks, Dunkin Donuts, Michael Kors, Brooks Brothers, Krispy Kreme, Naturals Ice cream, and Fab India - expanded their presence across India’s leading cities. Global retailers Burger King and Fat Burger made inroads into the country as well, with stores in Delhi. Sri Lanka’s premier spa lifestyle brand, Spa Ceylon, also made its India debut with a first outlet in Mumbai, the report said. Luxury jewellery brand Bvlgari re-entered India with a store at DLF Emporio, Delhi. The consultant said that increased activity was observed in the online retail space during the year. “Retailers such as Burton, Paper Dolls, Scotch & Soda, and Xiaomi entered into exclusive tie-ups with leading Indian online retailers for selling their merchandise rather than setting up physical stores. “Also, brands that are already established in the brick and mortar format such as Mango, Aldo, Superdry have also been keen on establishing their presence online,” CBRE said. Domestic brands are also towing the line with brands such as Shoppers Stop, Trendin (website for brands of Arvind mills such as Louie Philips, Van Heusen, Peter England, Allen Solly) setting up dedicated online shopping websites. Shoe brands such as Bata and Clarks have also set up portals for shopping on their respective websites. On the outlook for this year, CBRE said the first half is likely to witness a shift in development completions from the established hubs of Delhi and Mumbai, towards cities such as Bangalore, Hyderabad and Kolkata. “As availability of quality retail space in established markets of Delhi and Mumbai is expected to remain tight, rents in prime malls and high streets are expected to increase marginally,” the consultant added. CBRE expects leasing demand to strengthen on the back of an anticipated improvement in economic performance and likely execution of corporates’ expansion plan as the new year sets in. PTI