Developers turn 2.5 million square feet of proposed mall space into residences and commercial supply because of the impact of the economic slowdown.
The economic slowdown of 2008-09 has had its impact on the retail segment in Mumbai. Over the last one year, Mumbai-based developers have converted over 2.5 million sq ft of planned mall space into residential and commercial complexes.
Among the biggest developers to make this switch is realty firm Dynamix Balwas (DB Group), which shelved its ambitious retail venture to build the country’s largest shopping mall (over 10 lakh sq ft) in Dahisar after spending over a year planning and designing it.
The developer is now constructing low-income, budget homes on the land purchased for the Rs700-crore Dahisar mall, which was to be called Ozone Orchid. The group had earlier converted a mall project in Kandivli into a housing complex.
Orbit Corporation, a south Mumbai realtor, has also decided to convert a 2.5 lakh sq ft commercial development called Hafeez Contractor House in Lower Parel into a residential project. Ackruti City converted its more than 7 lakh sq ft mall space at Andheri into a residential and commercial complex. Dreams Mall, spread across
8 lakh sq ft in Kandivli and owned by Satra Properties, is being converted into residential space. Only 10% will remain for retail purposes.
The Housing Development and Infrastructure Ltd (HDIL) converted one million sq ft of retail space into commercial development. Rustomjee Builders changed a 4 lakh sq ft retail mall plan into commercial space. Also, the Raj Thackeray-owned Matushree Developers converted a 7 lakh sq ft retail mall plan into commercial space.
DB group officials said they did not press ahead with their retail projects because retailers were facing a downturn and threatening to move out if rents were not lowered.
Interesting, though developers deferred additional supplies of retail space, at 1.8-1.9 million sq ft, Mumbai still witnessed the largest share of this supply.
Said Jaideep Wahi, director of retail with Cushman and Wakefield: “The slowdown helped in maintaining a healthier supply-demand equation, especially for oversupplied micro-markets. With high vacancy levels as well as cautious expansion plans, the deferment of supply is a necessary measure to bring stability in the retail market.”
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