Retail space absorption in the country is expected to "bounce back" in the near future and expected to reach 15 million sq ft in the 2015-17 period, according to a real estate survey.
The lack of clarity on policies on the retailing sector, coupled with the strengthening of the e-commerce sector dealt a blow to the retail business hence retail space absorption had slowed down.
The absorption fell to an all time low of 2 million sq ft in 2014 with developers also cutting supply of retail space on account of large vacancy in existing malls. The absorption in 2012 and 2013 was 5 million sq ft each year. Year 2011 saw an all time high with absorption of 11 million sq ft.
But with clarity emerging in the retail policy for multi-brand retail and the onset of the Goods and Services Tax system from next year coupled with rising consumer confidence, the take up of retail space is expected to bounce back.
If international multi brand retailers find execution in India viable and stick to their plans, "absorption could increase by another 11 million sq ft, resulting in sharp turnaround in the retail sector," according to the report.
The advisory firm had recently said that only 12 malls in Delhi NCR out of a total 100 operational malls were running successfully. Even in Mumbai, out of a total of 45 malls, only 10-15 malls were "good performing malls".
The top seven cities of India, viz, Mumbai, Delhi, Bangalore, Pune, Kolkata, Chennai and Hyderabad, account for a total of 255 running malls.