Brand relocations cause rise in mall vacancies in A'bad
By: Pray Jani
Last updated : December 11, 2017 2:01 pm
The Alpha One Mall currently boasts of almost 100 per cent mall occupancy
Despite almost zero supply in the first quarter of 2014, Ahmedabad saw a rise in mall vacancy levels due to relocation of certain brands. According to developers and experts, while availability of quality space remained a concern in main street locations in Ahmedabad, mall rentals are also under pressure due to high mall vacancy levels.
"Most of the retailers take space hoping to enhance their market share. But when newer malls come and offer better reach and marketing programs along with attractive leasing arrangements, this results in retailers moving out of the existing mall to the new mall. This is what has happened in recent times in Ahmedabad leading to rising vacancy levels in certain malls," said Prodipta Sen, Executive Director - Marketing, Corporate Affairs & Retail at Alpha G:Corp that manages the Alpha One Mall in Ahmedabad. The Alpha One Mall currently boasts of almost 100 per cent mall occupancy.
In the latest report from global consultancy Cushman & Wakefield, the total
fresh mall supply by the end of 2014 is projected to be approximately 14
million square feet (msf) approx. in the top eight cities of India, of which
13.6 million square feet is still under construction. This is nearly 200 per
cent more than the supply received in 2013 which was recorded at almost 4.6
msf. For Ahmedabad, the mall vacancy rose to 31.6 per cent, according to
C&W, due to brand relocation for Q1 of calendar year 2014.
"Increasing vacancy levels were observed in a few malls along SG Highway
in Ahmedabad, as some of the brands relocated to other locations. The trend
resulted in mall vacancies increasing by 1.3 percentage points to 31.6 per cent
at the end of the first quarter.
Despite increasing vacancies, the landlords were observed to hold on to the
rentals. The mall rentals remained stable across all sub-markets during the
quarter," the report stated.
However, industry experts state that in recent times though mall supply has not
been added in the city, mismanagement by investor-run malls and poor brand and
space mix have also resulted in stagnancy.
"The newer malls that came up in recent times have been managed by owners
and have a good space mix since they have other facilities such as high end
multiplex and restaurants that ensure consistent footfalls. On the other hand,
there have been malls where ownership has changed hands and are only dependent
on retail space for footfalls. These malls are facing stagnancy and competition
from the newer ones, with certain brands even relocating to the latter,"
said Neeraj Tomar, head - Ahmedabad operations of Jones Lang LaSalle India (JLL).
Ahmedabad
Prodipta Sen Alpha G:Corp
Alpha One Mall
Neeraj Tomar
head - Jones Lang LaSalle India
Cushman & Wakefield
First Published : April 11, 2014 12:00 am