MMR to see nearly 13.6 mn sq. ft. of new mall space by 2022
MMR has been one of the major retail hubs in the country with most brands, big and small, eyeing to capture a piece of this vital market. The unrelenting demand for more retail space in the financial capital has prompted mall developers to boost their development pipeline. As per ANAROCK data, nearly 13.6 mn sq. ft. of new mall space is likely to come up in the entire MMR by 2022.
Of this total new supply, Mumbai accounts for a massive 82% share, followed by 17% in Navi Mumbai. The top organized retail destinations in Mumbai include Andheri, Bandra, Worli and Borivali, among others. The sizes of malls in the major micro markets are small, ranging between 1 lakh sq. ft. to 6 lakh sq. ft.
In Navi Mumbai, the prominent areas are Ghansoli and Jui Nagar. New upcoming retail supply in Navi Mumbai consists of malls sized between 5 lakh sq. ft. to 10 lakh sq. ft.
Interestingly, the vacancy levels in MMR are lower than in its major counterpart NCR, where average vacancy levels stood at 18.2% in 2018 while average rentals hovered around INR 137/sq. ft. In terms of new mall supply too, MMR races ahead of NCR with the latter likely to see new addition of approx. 7 mn sq. ft. space by 2022 – almost half of the total upcoming supply in entire MMR.
High Street hotspots in MMR
“Mumbai is home to some of the most prominent high street markets in the country. While multiple malls have opened across the region and are performing well, both high street retail and malls have their own unique clientele and trend quite differently.
However, high street retailers are now replicating malls by offering a more wholesome ‘experience’ instead of merely shopping. Mumbai’s high-end shopping markets are clearly aspiring to become unique shopping and entertainment destinations. This is very visible in prominent high street market like Andheri-Kurla Road, Pali Hills, Bandra West, Kala Ghoda and Powai. These high streets have also seen a phenomenal increase in fine-dining restaurant launches.” Anuj Kejriwal, MD & CEO – ANAROCK Retail
However, retailers find coping with the high monthly rentals at Mumbai’s high-end high streets challenging. In comparison to malls, the average monthly rental values are much higher in these key high street markets and range between INR 320/sft/month and INR 480/sft/month.
At such rentals, business sustainability on Mumbai’s high-end high streets is a major concern even for prominent brands – many players stay put solely because of their high-value clients. High street retailers also need to obtain a series of approvals from various government authorities to set up shop. In contrast, most malls have all requisite approvals in place and retailers can start operations immediately.