Going by the oversupply of space, mall developers, unfortunately, dont seem to have anticipated the pace of the scaling back. The abundance of mall space suggests they misread the demand environment completely and nowhere is this overestimation more evident than in Pune where the average vacancy is hitting 27%, a shade lower than the 30% in Ahmedabad.
The average actually masks the much higher 60%-80% vacancy levels in some of the citys malls raising serious questions about the viability studies done by the developers; the 2,00,000 square feet Nucleus Mall in the Camp areawhich saw its anchor tenant Shoppers Stop exitis 60% empty while the Seasons Mall is half empty. Big brands like Tatas Croma and Spencers have moved out of their respective malls and the Jewel Square Mallhousing brands like French Connection, Forever New and Mangoclosed down late last year. Whats worrying is that the large investments made to build theseSeasons was built at a cost of R450 croreare in jeopardy because even if the economy recovers these projects appear unviable given the extent of the oversupply. Which means bankers could be staring at some really big hits to their real estate loan portfolios.