After closure of some malls, Pune’s retail market is receiving renewed interest and fresh investment is coming in to the mall space. “Pune’s retail real estate sector is seeing significant churn and more global brands are lining up to expand their footprint,” said Mayank Sharan, local director, Retail, JLL India. The Pavilion on S B Road and Westend Mall in Aundh, which account for of 4.5 lakh sq ft and 4 lakh sq ft space respectively, plan to up their game with major international brands like H&M, Zara, Gant, Kenneth Cole, Brooks Brother, MAC Cosmetics and Superdry. Many global retailers are expanding their retail footprint in Pune and among them are H&M, Marks & Spencers, Decathlon and MAX, says JLL report. International retail giants like Walmart and IKEA are also considering Pune to set new stores. IKEA plans to acquire land parcels to execute entry into Pune in 2018-19, and Walmart is considering a suitable location to activate its stores. Both these retail giants will focus primarily on the brick-and-mortar model, but use e-commerce to supplement sales in the city, Sharan said.
There has been some important supply augmentation on Pune’s retail real estate market recently, particularly WestendMall in Aundh and The Pavilion Mall on S B Road, which is slated to become operational in 2017, says a JLL report.
The city’s retail market scenario was unfavourable in 2016 and a few malls were scrapped and proposed to be converted into office spaces. According to JLL India, the I?norbit Mall will soon be converted into a commercial space and has been taken over by Amazon to set up its IT/ITeS service. Kakade Centerport and Pulse Mall have been refurbished into office spaces. This was due to over supply in the Eastern corridor.
Among the malls which have managed to crack the code and stay highly relevant are Phoenix Market City on Nagar Road, Amanora Mall in Hadapsar, Seasons Mall next to Magarpatta City and Kumar Pacific Mall on Swargate, says JLL India.
Global High Street Mall, a newly launched centre in Hinjewadi Phase 2 has attracted considerable interest amongst retailers due to the ready available catchment, lack of a destination supply with the right ingredients. The centre which houses the largest PVR in Pune is due in Q4-2019. Nitesh Hub (formerly known as Koregaon Park Plaza) which now is operational on four floors and is witnessing considerable footfalls has plans of adding more brands and food offerings.
According to JLL India, the rental landscape has changed quite a lot in 2017, with quality malls seeing considerable with rental increments while others displayed slower or no growth. Pune’s Grade A malls where supply is short and demand is high, rentals have moved upward by as much as 10-15% recently. Capital values in high-demand malls have also seen significant increase in 2Q17 over 1Q17, going as high as 10% in some cases. This has led to a renewed interest by mall developers to invest in relevant Grade A retail supply.