NEW DELHI — A report by Cushman & Wakefield said mall vacancies in India’s major cities, including New Delhi, Bangalore and Calcutta, were as high as 19.6 percent in the first half of 2012 and that mall space was 30 percent less than previous projections.
Retailers often consider the region that includes the capital New Delhi and the surrounding areas of Gurgaon and Noida as a primary area for expansion. However, the region had a high mall vacancy level in the first half, at 28 percent.
An additional 120,000 square feet of retail space was added to malls in the region in the first quarter but none in the second quarter.
But the vacancy levels do not appear to have fazed the market and analysts consider it more as a note of caution than a real worry.
“With high vacancy levels as well as cautious expansion plans of retailers, the deferment of supply is a necessary measure to bring stability in the retail market,” Jaideep Wahi, director of the retail agency of Cushman & Wakefield India, explained. “The current pace is, in fact, expected to help in maintaining a healthier supply-to-demand equation, especially for oversupplied micro-markets.”
While Mumbai had a lower level of mall vacancies in the first half, at 10.4 percent, smaller cities such as Pune and Ahmedabad were much higher, with vacancies in Pune at 25.5 percent and Ahmedabad at 34 percent.
Bangalore, often considered the third-biggest retail stop after New Delhi and Mumbai, has added the most retail space this year — 1.5 million square feet. “The retail activity in the city continues to remain strong,” the report observed.
Even with the vacancy rates, Indian retailers continue to expand aggressively. Department store chain Shoppers Stop, for example, has opened 12 stores in the last year and 26 stores in the last three years, with plans to invest $5.3 billion in growth over the next three years. The same is true of global brands.
“Retailers of foreign brands still remain committed to the Indian markets with the recent announcements by multinational retailers indicating the strength of the economy,” Wahi said.
Reliance Brands, for instance, has made several new tie-ups in India and this month unveiled a joint venture with Brooks Bros. Darshan Mehta, president and chief executive of Reliance Brands, said the first stores would open in metro areas, focusing on Brooks Brothers’ core men’s wear, with women’s and children’s wear being added in future. The brand has already been in China for eight years.
Reliance Brands also has joint ventures with brands including Iconix, Ermenegildo Zegna and Diesel.
High mall rental rates have always been a major concern for retailers and, according to Cushman & Wakefield, rental values have largely remained stable, except for certain micro-markets in Bangalore, the New Delhi region, Calcutta and Mumbai. Mall rental rates in these areas have grown over the previous quarter in the range of 2 percent to 13 percent.
The highest growth in mall rental rates has been on Elgin Road in Calcutta, where the last quarter saw an increase of 12.4 percent, mostly owing to renewals of existing tenants at higher rents.
Wahi pointed out that high streets are more in favor with retailers, and this is substantiated by the fact that high streets across many of the big cities have shown a rise in rental value in the same time.
Select locations across Bangalore (including MG Road, Jayanagar, Koramangala and Vitthal Mallya Road) recorded rent increases of 8 to 9 percent over the previous quarter. Camac Street in Calcutta saw the highest increase in high street rentals at 25 percent, followed by MG Road in Bangalore at just over 9 percent. Gurgaon and Pune saw their high street rents rise 7 to 8 percent.
The report noted that in some cities, such as Hyderabad, prominent high streets (Banjara Hills, Jubilee Hills, Ameerpeet & A.S. Rao Nagar) saw a decline in rents of 4 to 7 percent compared to the previous quarter due to significant new construction in those markets.
Hyderabad’s overall mall vacancy rate remained stable at 8.2 percent.
The average rents at Koramangala mall in Bangalore are about 420 rupees, or $7.28 at current exchange, a square foot, up 5 percent over the last quarter, while Elgin Road mall in Calcutta is at 600 rupees, or $10.68, a square foot, up 12.6 percent over the last quarter.
In the New Delhi region, rents at Gurgaon malls are roughly 225 rupees, or $4.01, a square foot, up 7.1 percent in the last quarter.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast