Bangalore, Pune, Hyderabad and the four metros will have around 21 million sq ft oversupply in retail properties by 2012, says a new study.
The pace of real estate developments in these cities was expected to surpass the growth of organised retail market by then.
While the country's organised retail market is expected to grow from Rs 32,400 crore (Rs 324 billion) in 2010 to Rs 54,700 crore (Rs 547 billion) in 2012, the real estate retail potential (RERP), which indicates mall supply, will grow from Rs 43,000 crore (Rs 430 billion) in 2010 to Rs 75,400 crore (Rs 754 billion) in the next two years, the study titled 'India Organised Retail Market 2010' by global property consultant Knight Frank shows.
As a result, the oversupply is expected to grow from 11.46 million sq ft in 2010 to 21 million sq ft in 2012, the study says.
Pune with 5.78 million sq ft, Bangalore and Hyderabad with 5.41 million sq ft and 3.41 million sq ft of oversupply, respectively, are among the cities with highest oversupply.
"Developers will be cautious about developments now and rents will remain subdued till 2012,'' says Samantak Das, national head of research at Knight Frank.
