NATIONAL CAPITAL REGION RETAIL REPORT (New Delhi, Gurgaon and Noida)
A CUSHMAN & WAKEFIELD RESEARCH PUBLICATION
MALL DEVELOPMENT Mall supply during the first quarter of the year was recorded at 800,000 sq. ft. with malls getting operational in Faridabad and South Delhi. The mall rental values weakened across all micro markets owing to slow down in demand for retail space amidst current economic slowdown. The correction in rental values ranged between 7-17% over the last quarter with Noida noting the highest decline of 17%. MAIN STREET DEVELOPMENT Main Street rentals have noted significant correction over last year with values falling up to 25% during the first quarter of 2009. The prevailing rental values failed to match the expectation of the retailers forcing them to exercise caution in implementing their expansion plans. This has resulted in reduced churn of properties in the prominent main streets. The increase in mall space across NCR has impacted the business potential of several retailers at adjoining main streets. With malls opening in South Delhi, a drop in revenue has been witnessed in the neighbouring main streets locations, resulting in reduced demand and decline in rental values in the micromarkets. Greater Kailash I, M Block noted highest correction over the year and over the last quarter due to increasing prominence of other retail locations in the micromarket. OUTLOOK NCR is expected to witness mall supply of 4.0 million sq.ft. during the year, majority (3.6 million sq. ft.) of which is likely to become operational in the last quarter. However, slow down in the construction activity may lead to deferment of some projects. The existing mall space, increasing vacancy levels and the planned supply is likely to bring fundamental changes in mall positioning. In such a scenario, the developer will focus on introducing various retail concepts servicing the specific need of the targeted consumer. However, to support such initiative.