Track2Realty Exclusive: Analysis of North zone (Delhi NCR)
Owing to sluggish global and domestic economic growth, high inflation and steep depreciation in rupee value, market sentiment remained subdued during the first three quarters of 2012. International brands are still positive about the Indian growth story.
However, most of these brands have witnessed a slowdown due to high prices. Medium to high class foreign brands are also concentrating on making prices more competitive to ensure footfalls. The leasing activity, though much less in quantum, was spread across malls and high streets.
Owing to high vacancy levels and retailers going slow on expansion plans, Delhi NCR witnessed high mall supply deferment resulting in no new supply in the first three quarters of the year. As a result of continued rollover of projects to subsequent quarters, no new supply is expected by the end of the year as well.
With no new supply and modest take-up, the vacancy levels remained high in double digits. Enquiries and take-up activity were focused around the established malls with high footfalls while less popular malls continued to struggle to attract occupiers. These malls continue to register high vacancy levels. Retailers want to open stores only in high quality spaces.
Owing to subdued demand coupled with high vacancy levels, mall rental values remained largely stable across the city. The change in the FDI regime will propel the sector back on the growth track by raising the demand for organised retail space further. Most of the major developers in the country who had shifted their focus to residential are back to drawing up big retail plans. The sector is expected to witness heightened activity in the coming times.
Best performing micro markets:
– Organised retail space in Saket, Vasant Kunj in Delhi, MG Road in Gurgaon and Sector 18 in Noida continue to be amongst the best performing retail markets in the city. This can be attributed to availability of significant mid range and high end residential catchment areas in vicinity. High Streets such as Khan Market and Connaught Place continued to be the most sought after locations due to their established popularity.
Low performing markets:
– Malls on Sohna Road in Gurgaon continue to struggle to get enough footfalls and are more than 50% vacant.
Major Transactions:
| Company | Location | Mall/High Street | Area (sq ft) |
| Metro Cash & Carry | Karkardooma, East Delhi | – |
80,000 |
| Vijay Sales | Sec 29, Gurgaon | – |
20,000 |
| Marks & Spencer | South Extension,Delhi | – |
16,000 |
| Chili’s | Gurgaon | Ambience Mall |
8,800 |
Source: Market Intelligence, DTZ Research
Emerging Markets: Greater Noida
Developments expected: The new mall development activity in Delhi NCR is fairly restrained. About 3 million sq ft of mall space is expected to come on stream in 2013.
……to be continued
