NCR mall rentals surged up to 50% in one year

NEW DELHI: The mall space rentals in the national capital region have jumped by up to 50 per cent over the past one year, but are likely to witness correction due to increased supply in the long run, says a study.

According to a latest report on rentals of mall spaces by global real estate consultant C B Richard Ellis (CBRE), in the last one year, mall space rentals across the NCR have witnessed an increase between 30 per cent and 50 per cent.

"However, in the current quarter some locations witnessed a slight decline as compared to previous quarter values. The primary reason for this is the relaxation in demand for retail space at prevailing rentals and the financial viability of the retailers in the recently operational malls," it added.

The malls and stores in locations, like MG Road, Gurgaon, South Delhi and other prime high streets, would continue to report high conversions and sales and as such rentals in these locations are expected to remain stable in the short-to-medium term, CBRE said.

It added that, however, "the supply may take over demand in these locations in the long run and this will lead to a slight correction in values".

"A situation of over-supply and saturation resulting in subsequent correction of rentals may occur in certain pockets and micro-markets in the short to medium term," CBRE Chairman and Managing Director Anshuman Magazine said.

He, however, added that there was significant demand to cater to well planned malls in established locations which were not likely to see change in demand or values in the near future.