2018 set to witness highest supply of malls in six years

The area in malls is expected to rise by 7.8 million sq ft, the highest in the past six years, according to a new study.

JLL’ s reports ays the area of newly completed malls in 2017 was 5.6 million sq ft and is expected to see an increment of 40 per cent year-onyear in 2018.

The mall supply in the next three years is expected to be at 19.4 million square feet. In the same period, demand will be approximately 15 million sq ft.

The largest contribution to this will be coming from Hyderabad (2.2 mn sq ft) and Chennai (1.5 mn sq ft). Delhi-NCR will be witnessing the highest supply of 2.3 mn sq ft of new mall space in 2018, albeit recording a decline of 28% y-o-y since 2017.

“Further, we expect a parallel rationalisation of existing mall spaces, which will help the market avoid an oversupply situation. As a natural course of events, we can expect a few malls to close down or temporarily suspend their operations for repairs, renovation and upgrades. This will help themarket create the necessary balance to maintain the rental values,” JLL said. While retail mall space has started to see a rise in the market, JLL said it has also experienced some rationalisation in supply in the last year. It said that 2017 saw withdrawal of nearly 5 mn sq ft of retail space with a shut down of 28 malls. Most of the rationalisation took place in Delhi-NCR and Mumbai, owing to the fact that these markets have significant mall stocks with a considerable percentage of the same performing below par.