Only 36 new malls out of 75 got operational in 2008

According to real estate consultant firm Cushman & Wakefield, in the top eight cities, about 20 million sq ft mall area was to developed in 2008. But these cities -- Mumbai, Delhi, Kolkata, Chennai, Ahmedabad, Bangalore, Hyderabad and Pune -- saw only about 9.5 million sq ft become operational. Basically, out of the proposed 75 mall projects that were to come up in these cities, only 36 saw the light of the day.

Further, the National Captial Region and Mumbai were the top two cities that witnessed the highest decline in retail absorption. For instance, NCR was to see development of about seven million sq ft space but only four million sq ft came up.

Industry analysts say that in Mumbai some malls were being converted into offices. Hyderabad, Kolkata, Chennai and Pune also witnessed significant decline in the retail absorption in the malls.

Rajneesh Mahajan, director of retail services, India at Cushman & Wakefield said, “Many malls that were to open in 2009 may not come up at all. From the projected supply of 20 million sq ft space in 2008, we might see a spill over of about one million sq ft development in 2009. Lack of funds leading to construction delays and rack rate lease rentals, wherein whoever pays more gets the space has resulted in slow absorption of retail space in malls.”

Mahajan added that some retailers over projected their revenues from their outlets in the malls, therefore, adopting a cautious approach to expansion in malls.