Lack of mall space leads to shortage on high streets

Lack of mall space leads to shortage on high streets

Anil Urs / Chennai/ Bangalore May 13, 2008, 4:47 IST



The absence of adequate mall space in Bangalore has led to a severe shortage of retail space on the high streets. However, rentals have remained stagnant on M G Road, Commercial Street, Indiranagar 100 Feet Road, Sampige Road in Malleswaram, Koramangala 80 Feet Road and New BEL Road.


Koramangala and Indiranagar, though a relatively new high street, are facing a serious space shortages with most new developments only replacing the older ones.

The main reason for shortage of retail space in Bangalore is attributed to nil supply of mall space in the last two quarters.

According to Cushman & Wakefield research: "Barring the supply of 6.1 million square feet of retail space by 2007-end, the first quarter (Q1) of 2008 did not see any new additions to mall space in Bangalore. Even the most anticipated of all mall launches - UB City's ‘The Collection' on Vittal Mallya Road (CBD) - has been postponed to third quarter of 2008."

"Due to this lack of fresh supply, no mall retail transactions were recorded in the last two quarters, leading to stagnant rentals across locations in the city in Q1 2008," it said.

A significant supply of mall space being staggered to the latter half of 2008, no fresh supply is expected in the next two quarters. By third quarter of 2008, the CBD is expected to see a fresh mall supply of 120,000 square feet; east Bangalore, an additional 755,000 square feet and the south, an addition of approximately 388,630 square feet by end-2008.

In the absence of retail space, ground floor rentals of established main streets like Vittal Mallya Road, Jayanagar 4th Block (11th Main) and Brigade Road experienced a marginal upswing over the last quarter.

With the Dutch retail giant Spar Hypermarket setting up shop in Bangalore (in partnership with the Landmark Group for India operations), followed by Star Bazaar's Bangalore outlet and the latest Total hypermarket in the city - hypermarkets will be the retail formats to look out for, said Cushman Wakefield research.

More such big outlets from Reliance Retail, the Piramyd Group and Aditya Birla Retail are expected shortly.

As far as retail rentals' outlook is concerned, "The city will face a wave of rental corrections across malls and main streets in the near future. In the short-term, however, retail rentals across Bangalore are likely to remain stagnant over the second quarter 2008, though high street rentals on locations like Vittal Mallya Road, Jayanagar 4th Block (11th Main) and Brigade Road are likely to witness a minor appreciation in the coming quarter," said Cushman Wakefield research.