Shopping malls to grow in size, numbers in 2014: Report

New Delhi: Net addition to mall space in Chennai, Delhi, Bangalore, Mumbai, Kolkata, Hyderabad and Pune is set to more than double to 11.6 million square feet in 2014. This will take up the mall stock across India’s metropolitan cities to 87.7 million sq feet by the end of the year, according to a new report by real estate consultancy firm Jones Lang LaSalle.

At the end of 2013, the built-up mall area across these seven cities stood at 76 million sq feet. It is estimated this will cross the 100 million sq feet mark in 2016, touching 107.8 million sq feet in 2017.

City statistics
Among the cities, Delhi and Mumbai lead the rest of the country in terms of the highest concentration of shopping malls, accounting for 62 per cent of pan-India mall stock. They are followed by Chennai and Bangalore, which together constitute around 20 per cent of built-up mall space in the country. In 2013, net addition of approximately 5.2 million sq feet of mall space was registered, translating into a 22 per cent in crease in comparison to the previous year. Chennai led with creation of nearly 2 million sq feet of fresh supply, followed by Mumbai and Pune. But in 2014, Delhi is expected to be the driver for net addition of shopping malls in the metros.

Design trends
The report suggests that the average size of malls is likely to increase in the coming years as developers are focusing on project sizes that allow for a critical mass in terms of various formats and categories under one roof. In 2014, the average size of malls is estimated at around 3.8 lakh square feet, which is expected to increase to 4.7 lakh square feet in 2015 and further to 6.6 lakh square feet in 2017.

There is also an increasing trend among upcoming malls to adopt a structured approach in planning, execution and launch, Jones Lang LaSalle says. The importance of formulating an optimal tenant mix to ensure maximum utilisation of retail space is now recognised and accepted by major mall developers. This will enable them to cash in on retailer interest in upcoming projects that offer not just a good location, but have been optimised in terms of design and their trade and tenant mix.

JLL launches separate consultation arm for non-realty firms

NEW DELHI: The country's largestproperty consultantJones Lang LaSalle India today said it has started a new arm to service non-realty focused companies that want to put in money in the sector as an investment purpose only.

The company has launched a new division -- JLL Corporate Finance, which has already brokered some high profile deals such asJet Airways tying up with Godrej Properties to develop 2.5 acres land in Bandra Kurla Complex andMafatlal Industries selling 7.6 acres land to Piramal Realty for Rs 605.80 crore.

"Real estate as an investment and asset class has existed in India almost forever. However, this sector has also been limited in many respects by a severe dearth of information.

"JLL Corporate Finance will assist corporates to make informed decisions about acquiring, disposing of or optimally utilising their real estate, regardless of whether they occupy it or have acquired it purely from an investment perspective," Jones Lang LaSalle (JLL) India Chairman and Country Head Anuj Puri said in a statement.

The consultant firm said every business is functionally into real estate as traditionally all Indian corporates have parked funds in this sector when they have excess liquidity, especially when they perceive the property market to be down.

However,JLL India said not all companies or businesses have has the expertise required to make sound business decisions about their realty holdings.

"During times of market improvement or when they require liquidity to rake back into their business, they tend to monetise their real estate holdings," it added.

JLL Corporate Finance Managing Director Ambar Maheshwari said the companies, for whom real estate is not a core business focus, are engaged in such dealings on a gut-feel and promoter-driven perspective.

"Such a perspective can only come with a sound understanding of the real estate sector, which is extremely important when it comes to addressing the shareholder value issue. Real estate is a substantial asset class and unless corporates optimise the returns their real estate portfolios yield, shareholder value is compromised," he added.