Successful Malls Asking Three Fold Increase In Rentals: JLL
New Delhi: Rentals for retailers in successful malls are rising very fast with some of the malls now asking three times the rent that they were asking until last year. Seeing an opportunity to raise rentals more frequently, they are shortening the rental tenures, says a report by property consultant JLL.
Then retailers are squeezed because of various factors and are now shifting focus to tier 2 and also reducing store sizes.
“Retailers are struggling at various fronts apart from rising rentals. Under-performing, less efficient stores with huge inventory pile-up of merchandise, stiff price competition from dominant e-commerce players and poor inventory management are some of the challenges retailers have. Shifting focus to tier II and III markets is also helping them to combat the problem of excess unsold inventory. Additionally, creating multiple touchpoints for consumers along with having an omnichannel presence within the sphere,” said Shubhranshu Pani, MD, Retail Services, JLL.
Another trend which is developing is that retailers are signing rentals deals purely on the basis of revenue-share.
Retailers are more excited about tier 2 and 3 towns as the real estate costs are 30-40 percent lower as compared to metros and these places are still unexplored, the report said.