An analysis done by Jones Lang LaSalle (JLL), indicated that Chennai saw the highest absorption in retail space in the first half of 2018.
“The total net absorption was recorded at close to 2 million square feet in the top seven cities of India of which Chennai saw the highest absorption at 9,50,000 square feet,” according to a statement issued by the real estate services firm.
It added, “Chennai saw the completion of a major retail project which attracted many brands to start operations.”
Ramesh Nair, CEO & Country Head, JLL India, said that Chennai has the capacity to accommodate three to four more malls in the coming years.
Pioneer in mall culture
“Consumers in Chennai are spending more these days. Entertainment and food are evolving formats which are gaining traction in the city,” he added. Mr. Ramesh said that it was Chennai which opened doors to and embraced the first mall – Spencer Plaza — in the country decades ago.
“The city is the pioneer in mall culture,” he said.
JLL, in their half yearly update note also said that net absorption in H1 2018 for retail space has seen a rise of over 75% year-on-year, recording a total absorption of 1.9 million square feet.
At the same time, new completions saw a decline of about 25% year-on-year with total completion of new mall space recorded at approximately 2.1 million square feet in H1 2018, against over 2.8 million square feet in H1 2017.
The retail market, which has been experiencing a new lease of life with investment interest returning to the market, has also see a growth in leasing activities from both international and domestic brands.
Estimation
JLL’s estimation for next 6 months of 2018 (July – December) is to see fresh supplies of 3.7 million square feet in the top seven cities of the country.
Of the total, Hyderabad will see the highest volume of 1.8 million square feet. Delhi at 7, 15,000 square feet will see the next highest volume of mall space supply followed by Chennai (511,000 square feet) and Bangalore (500,000 square feet).
Pune is expected to be the only market which will not see any new addition of retail mall space in 2018.