Mushrooming malls will not impact high street retailing

Mushrooming malls will not impact high street retailing
Business Standard

Completion of three malls, totalling 4,85,000 sq ft is unlikely to impact standalone retailers in the city’s prime shopping areas like Commercial Street, Brigade Road and M G Roads.

The ‘Garuda Mall’ (3,00,000 sq feet) on Magrath Road is complete with a few stores already operational, ‘Sigma Mall’ (120,000 sq feet ) on Cunningham Road is set to open in July and ‘Prestige Eva’ (65,000 sq feet) on Brigade Road is also set to be open around the same time.

Even with more space getting into the market, prices are still ruling high. Retail space in the central business district (CBD) commands the highest price followed by the secondary districts or residential localities.

Bangalore is set to witness a retail boom in 2005 and 2006, with a number of malls coming up in the different quadrants of the city, says Jones Lang LaSalle India’s Bangalore city report.

After the success of Prestige group’s ‘Forum’ and Pantaloon’s ‘Central’, more national and international brands are looking for space in Bangalore.

A flood of brands has pushed the rate for retail space even higher than that for commercial real estate and is now commanding between Rs 90 to Rs 150 per sq ft.

According to the the Jones Lang LaSalle India’s report, rental values and capital values in Bangalore’s prime high street locations may continue to rise due to low vacany levels in the malls.

The city witnessed steady levels of transactions across all the micro markets. There was an appreciation in the rental and capital values of about 4 per cent in Q1 2005 on Q4 2004 in the prime high street location of Brigade Road and by 10 per cent in Indiranagar. However rental values on MG Road and Commercial Street remained stable at the Q4 2004 levels.

“With more malls mushrooming in Bangalore, demand for high street space has not diminished. Commercial Street, Brigade Road and M G Road still command a premium from well known brands who have adopted the dual strategy of both mall and stand alone store initiatives,” said Mahesh Lakshman of Chesteron Megharaj.