Mall space in Chennai to see momentum after LS elections
According to Cushman & Wakefield commercial real estate services firm, it is expected that after the Parliament elections the mall space in Chennai will see an improvement in momentum as there might be some policy changes on the anvil for the retailers.
It added that due to external factors like current economic climate and impending general elections, coupled with the new supply infusion of about 1.1 million sft, the vacancy levels are expected to go upwards in the first half of 2014. These external factors have led retailers to adopt a wait-and-watch approach and expand selectively in major locations this year.
“However, the situation is expected to improve, post the changes in the political environment, as some new policy changes might be on the anvil for retailers. Meanwhile, the number of international retailers entering Chennai is expected to increase mainly because of the availability of more options,” Cushman & Wakefield said.
With a total cumulative area of 1.1 million sft two shopping malls are under construction as of now and are expected to become operational by June 2014. Once operational, the peripheral locations of Rajiv Gandhi Salai and Vandalur will be catered by these malls. According to Cushman & Wakefield, Chennai has a total mall inventory of 4.9 million sft comprising 12 shopping malls, out of which 93.5 per cent is currently occupied.
For prominent malls in central locations the demand is high from apparels, footwear and accessories retailers. Three shopping malls out of the 12 were opened in 2013. In Velachery both the malls opened with an occupancy ratio of 90-95 per cent while the mall in another part of the city was pegged at the occupancy ratio slightly lower at about 80-85 per cent.
The prime drivers which determine occupancy ratios and attract retailers are the factors like construction quality, mall management and design aspects, as a result some malls in Chennai have performed better than the others, the company said. Some of the other important aspects that retailers also consider are location and residential catchments in the vicinity of the mall, it added.
Source: Business Standard
Chennai, construction quality, Cushman & Wakefield, Design aspects, Economic climate, general elections, international retailers, Mall management, Malls, Occupancy ratios, Political environment, Rajiv Gandhi Salai, residential catchments, Retailers, Vandalur, Velachery
