Despite stable rental values, Ahmedabad registered the highest mall vacancy of 28.70 per cent for the third quarter of calendar year 2013 among the top eight cities.
According to Cushman & Wakefield's latest retail reports, the overall vacancy levels in malls declined by 0.6 percentage to 14.51 per cent on account of consistent leasing activities.
On the brighter side, however, Ahmedabad's own mall vacancy came down from 33.90 per cent in Q3 of 2012 to 28.70 per cent for the corresponding quarter this year.
In this quarter, Ahmedabad witnessed steady rental trend in malls as well as main streets. While the demand for main streets like CG Road and Prahladnagar remained high, retailers did not exhibit preference for mall spaces.
Though some amount of churn was noted in C.G. Road, the transactions happened at similar rents, which kept the rents stable. SG Highway and Prahladnagar are witnessing significant enquiry level from F&B retailers.
Select national as well as local jewelers are aggressively expanding their footprint in the city and the enquiry level remains high.
Some transactions were witnessed in malls on SG Highway and Ring road, but the high level of vacancy kept the rentals under pressure.
Ahmedabad noted mall vacancy of 28.8 per cent in the third quarter, declining slightly by 0.4 percentage points owing to some leasing activity and absence of fresh mall supply in this quarter also.
As there are no malls under construction in the city, prominent malls in Vastrapur and Drive-in Road are anticipated to witness some upward movement in rentals. Main street rentals at C.G. Road, Prahladnagar and LawGarden may rise owing to the low availability of spaces and healthy demand.
In other cities studied by Cushman and Wakefield's report, healthy transaction activity led to reduction in overall mall vacancy of Pune and Kolkata despite the addition of fresh mall space in both the cities.
Pune witnessed the opening of a new mall measuring 700.000 sq ft, while Kolkata witnessed the partial opening of a mall with only anchors and mini-anchor stores operational at 70,000 sq ft.
Increased leasing activities and lack of infusion of new mall space led to a 1.8 per cent dip in Bangalore's mall vacancy. Chennai and Ahmedabad witnessed marginal reduction in mall vacancy.
"Given the low availability of quality retail spaces, select established main streets continue to gain traction. International and national apparels, footwear, F&B and jewellery retailers seem to be expanding aggressively. Landlords are being sensible and in case of excess supply, they are reducing the rentals even in main streets," said Sanjay Dutt, Executive Managing Director- South Asia, Cushman & Wakefield India.