CHENNAI: Over the last decade or so, Chennai has grown by leaps and bounds, and as the city’s peripheries have expanded so has the retail sector. Along with the city’s resilient residential and commercial sectors, the retail format has held fort through the economic turbulence of 2019. On the back of sustained consumption and demand, Chennai is gearing up for a slew of new malls. As per ANAROCK research, at least nine new malls sprawling over 5.1 mn sq ft area are likely to come up in the city by the end of 2022. The prominent areas that will see these new malls include OMR, Anna Nagar, Perambur, Saligramam and Navalur.
At the pan-India level, around 100 new malls are likely to come up across cities and towns by 2022-end. Interestingly, south Indian cities will account for more than a third of the new supply with at least 35 new malls. Chennai is just behind Hyderabad that will host at least 12 new malls. On the other hand, Bengaluru is also set to have nine new malls by 2022 spread over more than 5 mn sq ft. So, what are the factors that have helped the retail format to stay vibrant in this southern capital?
Easy accessibility
As per ANAROCK research, the top seven cities in India collectively have 105 operational malls sprawling over 50 mn sq ft area, of which Chennai has 10 operational malls spanning over 5.9 mn sq ft area. The city’s top-performing malls are in prime locations that are easily accessible by both public and private transport. The presence of entertainment options such as cinema halls have also driven footfalls to these malls. Consider the malls in and around Anna Nagar such as Forum Vijaya Mall and VR Chennai. Well-connected by Metro, these malls have scaled new levels of popularity which is evident in the healthy footfalls at Forum Mall located in Vadapalani.
Leasing in mind
Retailers in fashion and apparel category as well as food and beverages have been on a leasing spree across malls and high streets in Chennai. Thanks to the evolving cosmopolitan milieu of the city, leading brands have taken up space in popular malls over the last two quarters. Average monthly rentals in the city are pegged between `70 to `150 per sq ft, while vacancy levels are at par with Hyderabad at 14 per cent and higher than Bengaluru where they are at 10 per cent. Several malls are either already operational or are coming up in economically vibrant south Chennai which is also home to thousands of IT/ITeS professionals. Malls such as Grand Square, Phoenix MarketCity and Palladium are already buzzing, and the OMR belt will welcome at least three new malls over the next three years.
Funding the future
Despite a tepid 2019 that saw retail leasing activity across top seven cities dropping by 35 per cent as against the previous year, financial backing by institutional investors will keep the momentum going. Over $3 billion institutional funding was pumped into India’s retail sector between 2015 and 2019. Of this, south Indian cities have seen a total inflow of more than $500 million. For retail in Chennai to continue bucking the slowdown, more institutional funds need to keep flowing in. The writer is the city head and senior vice president, residential–Chennai, Anarock Property Consultants Pvt. Ltd.
Research data
As per ANAROCK research, the top seven cities in India collectively have 105 operational malls sprawling over 50 mn sq ft area, of which Chennai has 10 operational malls