It’s raining malls in Hyderabad

November 6, 2006	(Be the first to rate this story!)  Loading ...
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To say that it’s raining malls in happening Hyderabad would be an exaggeration. But there is also a mad rush among real estate developers and builders. With real estate booming in the city, both in residential and commercial property development, the herd is heading towards constructing malls.

Consider this: there are around 15 malls slated to come up in and around the city in the next few months to a year. Some of the big names include the GVK One Mall in the upmarket Banjara Hills and MPM Mall in the same area. In fact, contrary to popular perception that there is an oversupply of space for malls and retail, there is a growing demand for them. “It is not true that there is an oversupply of space. In fact, many of the malls are not planned correctly by developers. Moreover, most of them do not have a good understanding of the economics of the tenants’ business and pricing them accordingly,” observes Arvind Singhal, chairman, Technopak, a consultancy specialising in retailing and consumer goods. That is the reason why in some areas there is a dearth of customers, and some are even offering mall space as as office space.

Moreover, there is a herd instinct among developers resulting in a heavy concentration of malls in some select areas like Gachi Bowli and Kukatpally. For instance, infrastructure majors Lanco and IVRCL are coming up with their own brands of malls in the Gachi Bowli area, dubbed the IT and ITeS bay of Hyderabad.

“Yes, it’s a herd mentality leading to a skew in the spread. There are many areas which are good catchment areas for malls to come up like Tarnaka, Uppal in the south and Tirumalgiri in the north with a vast middle and upper middle class population but the rush seems towards the West for the IT crowd,” explains I Syamprasad Reddy, managing director, Indu Projects Ltd. Another interesting trend—of the spread of malls in the twin cities—is their preference for the existing commercial locations, often converting old properties even cinema theatres into malls which neither have the space nor the supporting facilities for a mall. Parking space is one major issue that often causes chaos in the surrounding areas. This is done either by flouting building norms or by making use of loopholes in the weak building laws.

While this is so, observers say that the demand for malls will remain buoyant for the next five or more years once the skew is corrected. “There will be a definite demand for malls. But the issue is of rent. Most developers price it based on the old showroom on the ground floor, and offices on the first and above floors model which is not logical anymore,” points out Reddy. According to one estimate at least 600 million sq ft of space is required in the next five years against the current 150 million sq ft available across the country.

Source: www.financialexpress.com

News Published Under:   Real Estate India, Hyderabad |

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