Retail Woes: Total Mall Supply In The Country Will Double In 2010

The retail party seems to be over, with rentals witnessing a major dip across the country. But what's adding to the negative sentimentMalls in India More Pictures is the over supply waiting to come up in the next couple of years. It is estimated that the total mall supply in the country will double in 2010 as compared to the supply slated to come up this year.
SundayET, along with global real estate services firm Cushman & Wakefield, conducted a survey in the top seven cities, which reveals that despite the slowdown this year, there will be more than 16.5 million sq ft of fresh retail space supply. In fact, by 2010, these figures are going to cross a whopping 32.5 million sq ft.
Interestingly, this year the NCR region tops the list with more than 7.5 million sq ft of additional space, while in 2010 the retail supply here will come down to 5.5 million sq ft only. The real growth in the retail supply will come in Hyderabad, which will cross nearly 7 million sq ft in 2010.
Experts things will only get worse. Says Kishore Biyani, CEO of the Future Group: "The risk element of the developers will increase with so much supply slated to come up. To sustain this, we need to look and work at the dynamics of how the market can grow. Till such time the retail market does not grow, it will be very difficult to absorb such kind of space. In the near future, the market has to stabilise as far as rentals are concerned. Productivity is a key factor for any retailer to operate efficiently in a mall, in case of a leased deal. We have changed our business model and are now operating on a revenue-sharing model in the malls."