Shopping malls hit by economic slowdown
India’s economic slowdown is reflected in the realty sector in the last few months.
Asia’s third-largest economy is growing at its slowest pace in nine years and slow consumer expenditure has hit the retail market and the mushrooming malls.
Real estate prices and construction costs are rising but the retail business is not growing enough to absorb the rising cost. Developers are shutting down stores in areas where rentals are too high.
With the slowdown in consumption adversely affecting things, the picture looks gloomy at present.
The retail vacancy rates are 20 percent and will likely rise to 25 percent by 2014. According to Jones Lang LaSalle, of the 12 million square feet of Indian shopping center space planned for inaugural in 2012, only about 60 percent is anticipated to do so.
The situation in Mumbai, the erstwhile mecca of realty in India, is far from being satisfactory. Even in fast-growing cities like Ahmedabad, Pune and the New Delhi region, vacancy rates at malls are more than 25 percent.
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Source: Economic Times
Ahmedabad, Construction costs, Jones Lang LaSalle, Malls, Mumbai, New Delhi, Pune, Real estate prices, Realty sector, rentals, Retail market, retail vacancy rates
