Developers shelve plans for new ones; some let out mall space for commercial use

* The Kohinoor group which had planned a six-storey mall as part of its Kohinoor City at Kurla has now decided to go in for a less ambitious two-storey one. The group has decided to instead increase the commercial component of the project.

* Even a strategic location bang opposite Santacruz station couldn’t help bail out the Hi-life mall which failed to get retailers for the top three floors of the five-storeyed mall. After six months, these floors are now being let out as office space after retaining the retail outlets on the first two floors.

* The swanky two lakh sq ft Atria mall at Worli has a high vacancy rate of more than 24%, the average vacancy rate in malls usually being 5%.

The glut caused by the burgeoning number of malls in the city has led to several developers shelving their plans for malls and instead going in for office spaces. A few have been compelled to lease out part of their already constructed mall complex to offices after they found no takers amongst retailers.

To make matter worse, at a time when the economic slowdown has caused retailers to go slow on their expansion plans, 1.7 million sq ft of supply is near completion in Mumbai and is expected to enter the market over the coming few months.

According to Pankaj Kapoor, CEO of the real estate research and analyses agency Liases Foras, Mumbai’s real estate has an oversupply scenario in the retail sector with 125 malls in the city including the under construction ones. “Retailers are cost-sensitive and with inflation the profit margin of retail companies has gone down. The same is true for consumer affordability. DLF and India Bulls were the first to do away with their plans for malls or reduce the area for the same at their under construction projects at Lower Parel.”

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