A survey by ET, along with Cushman & Wakefield, conducted in the top seven cities, reveals that despite the slowdown, there will be more than 16.5 million sq ft of fresh retail space supply added this year. By 2010, these figures are going to cross a whopping 32.5 million sq ft.
Interestingly, the space in the NCR region is expected to come down from more than 7.5 million sq ft of additional space to 5.5 million sq ft by 2010. Hyderabad is expected to cross nearly 7 million sq ft in 2010.
Kishore Biyani, CEO of the Future Group, says: "The risk element of the developers will increase with so much supply slated to come up. Till such time the retail market does not grow, it will be very difficult to absorb such kind of space. In the near future, the market has to stabilise as far as rentals are concerned.' Biyani adds that they have changed their business model and are now operating on a revenue-sharing model in the malls."
The supply in these cities may also see a correction in the coming years. The actual supply may be lower than the planned supply, due to delay in the delivery or some developers postponing construction. The large development houses that are going on with their projects may also run behind their timelines due to approval and construction delays.
The current economic crisis is expected to delay completion of several projects already under construction. New projects that are on the drawing boards may not see light of the day for a few years.
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