Property Management Start-ups to the Rescue of NRI Investors

Periodic inspection of properties, assured care and rental assistance make companies such as Rentprop4u a hit with those away from home

If there is one reliable thing NRIs have always vouched for and continue to invest in, it is property back home in India. Bengaluru, Kochi, Mumbai, Ahmedabad and Delhi have been investment hotspots. However, the lucrative investment comes with strings attached - how does one know their tenant is good, that their house is not damaged in their absence, or what if the tenant calls them from across the seas to get a plumbing problem fixed?

Being so far off, and rarely visiting their hometowns, NRIs now are turning to property management companies to take care of the nitty-gritty of their treasured properties.

Rentprop4u, a Bengaluru-based realty start-up, says it has seen an almost 60 per cent increase in the number of enquiries over the past one year from NRIs in Australia, US, Canada, New Zealand and the Gulf. The company helps NRIs realise the full potential of their real estate investments. 

"Usually, NRI homeowners are worried about things like finding the right tenant quickly, showing the property, tenant vacation hassles and legal implications, rent variation, lack of tenant screening and house maintenance, dependency on brokers and inability to inspect the property during tenant stay," says Nagaraju M, CEO, Rentprop4u.

Nagaraju lays out the current details, very specific to NRIs - nearly 25 per cent of apartments in Bengaluru are bought by NRIs. In Kochi, it is about 40 per cent. Investment by NRIs in other cities such as MMR, NCR, Ahmedabad, Chennai and Dehradun varies between 5 to 10 per cent of the overall market sales.

According to the 2011 census of India, out of the 90 million residential census units, 11 million units were vacant; that is about 12 per cent of the total urban housing stock. And a lot of homeowners prefer to let their investments lie idle rather than face the trouble of letting them out.

Nagaraju speaks of how companies like his have now become popular with NRIs, because they offer 100 per cent property assistance - including rent assistance, rental agreements and payments, maintenance, quarterly inspection of properties with photographs taken and sent to owners. They also offer niche on-demand services such as furnishing and payment of property taxes.

Rentprop4u takes care of one other worry for NRIs - safety - through tenant screening and background verification as well. They do a police verification of the tenant through their legal team.

Established in 2016, Rentprop4u currently has 200-plus registered properties and more than 400 users. Be it a single property or a large portfolio, the company is so confident of its tenant placement services that it guarantees to let out the property in less than 30 days or start paying the rent to the owner within a month.

"We give them 15-20 per cent higher returns compared to brokers, so NRIs find our deals attractive. We can assure uninterrupted rent payments to property owners even when some of the properties are vacant for short periods," he adds.

No Hope of Revival for Struggling Real Estate Sector this Diwali

Buried under high debt and inability of the developers to complete and hand over the pending projects well beyond the commitments to the hard-pressed consumers, the troubled Indian housing sector is not witnessing any festive activity this year despite the latest cut in the policy interest rate by the Reserve Bank of India (RBI), an ASSOCHAM survey has said.  

  

Based on the data and information collected from 250 builders in the Delhi-NCR, Mumbai, Bengaluru, Chennai, Kolkata, Ahmedabad, Hyderabad, Pune, Chandigarh and Dehradun, the survey found that the demand for new projects is hard to come while new launches have come to a trickle, marked by lack of consumer confidence and cash deficit of the builders.

Under such a scenario, the demand for new launches, if at all there are, has come down by over 50-60 per cent in Delhi-NCR and Mumbai while it is lesser by about 40-45 per cent in Hyderabad and Chennai. In Bengaluru, the activity has come to a total standstill, first by the demolition drive and then by Cauvery dispute agitation, adds the recent survey. 

“Whatever market is there, it is mainly for the end-users and not for investors, sale has been increased for the smaller units (2 BHK & 3 BHK)”, reveals the survey. 

“Customers are preferably looking for ready to move in property rather than going for under construction property. But not many properties fall in this category”, adds the Secretary General D S Rawat.

The resale or secondary market is also dull this festival season, marked by drop of at least 20-25 in prices this festive season. There is very little resale happening especially in the NCR and surrounding areas. Supply is in excess with private small time builders in the unorganised sector flooding the market with units.

The unsold inventory pressure in NCR region is the highest among all other cities. The NCR residential market still has an estimated 1,70,000 units of unsold inventory which is approximately 30% of the units under construction, adds the survey. As per the survey, there are nearly 8-10 million workers engaged in building and other construction activities who face uncertain future if the sector does not revive.

The ticket price 3-bedroom, 2 BHK and single room flats has seen correction by 30% in Noida, 25% in Gurgaon and 15% in some key areas of Delhi, yet the demand stays subdued

All approvals of real estate projects must be accorded in a time bound, accountable and simplifies manner, the ASSOCHAM said suggesting that the process and status of all approvals be made on line so as to bring transparency.

The property analysts have predicted that till March next year the demand for plots, houses and flats may drop by at least 15 to 20%. The housing inventory in the NCR area is huge as a large number of projects are coming up in the peripheral areas, said Rawat. 

Piramal Realty Launches 70-storey Signature Project Piramal Aranya at Byculla

Piramal Realty, the real estate development arm of Piramal Group, has launched its signature luxury project ‘Piramal Aranya’ at Byculla, Mumbai.  Reaching about 70-storey high, the residential skyscraper will be amongst the tallest buildings in the city.

Piramal Aranya is spread across 7 acres and has breathtaking views of the 60 acres of lush botanical gardens on the west and the picturesque Mumbai skyline and Mumbai Harbour on the East.

Over the lifecycle of this project, Piramal Realty will invest INR 4300 crores for its signature project and employ over 2000 people directly & 10,000+ people indirectly, a release said.

Piramal Aranya is adjacent to Jijamata Udyan, better known as the Byculla zoo, which just celebrated its 155th anniversary and boasts of 1200 species of flora and dense foliage, which makes this a unique opportunity to experience the abundance of nature in South Mumbai.

This is a limited pre-launch opportunity, between March 5 to March 22, for select luxurious 3 and 4 bedroom residences – that range from 1700 square feet to 2600 square feet carpet area, priced between INR 8 crore to INR 12 crore, respectively.

For the first 25 units, there is a special offer which will assure a price benefit of INR 30 lacs on 3 BHK and INR 40 lacs on 4 BHK over the pre-launch price. For this exclusive launch, the company has adopted a unique EOI (Expression of Interest) strategy that allows customers to understand the product proposition and register for the pre-launch offer with a token amount of INR 10 lacs only.

Anand Piramal, Executive Director, Piramal Group said:  “Piramal Aranya will be our company’s most significant residential development. We endeavour to build a world-class luxurious residential high-rise in the city. We have assembled one of the world’s best teams to deliver this project. The residential towers will be as good as any that you see in the finest cities of the world. We strive to delight our customers and be true to our core Piramal values and brand.”

Commenting on the location Anand added:

“Byculla is blessed with tree-lined avenues and several heritage buildings such as Bhau Daji Musuem, Magen David Synagogue, Gloria Church amongst others. It was also home to the Mumbai’s most prestigious club - The Byculla Club. We hope that with several new developments in tandem with Piramal Aranya, Byculla will once again emerge as the cultural nerve centre of the city. It enjoys easy access to South Mumbai via JJ Flyover and the Eastern Freeway that has opened connectivity to northern Suburbs and Navi Mumbai. We foresee it becoming the new hub for Mumbai’s elite.”

Piramal Aranya’s design is contemporary yet classical. Sophisticated landscape, private residences, dual aspect homes with light, space and ventilation, community spaces and outdoor terraces are artfully enhanced by rich and luxurious materials. Elegant and environmentally sound, each material has been selected to captivate and soothe the senses of its residents.

 Piramal Aranya has international partners such as:

Make Architects is an architectural practice based in the United Kingdom founded by Ken Shuttleworth and are Piramal Aranya’s principal architects. They are currently engaged in projects worldwide ranging from high rise offices to urban masterplans, Make Architects have also been ranked 46th in The Sunday Times 100 Best Small Companies to Work For & Practice of the Year - South East and London by the Architects Journal at the AJ100 Awards

Hirsch Bedner Associates leading the hospitality interior design industry since 1964, Hirsch Bedner Associates are the name behind The Ritz-Carlton at Dubai International Financial Centre, Waldorf Astoria, Shanghai and The Ritz-Carlton, Hong Kong.They have won numerous awards such as the Best Overall Resort Design for the Four Seasons, Seychelles which was one of the six awards won at the 2010 Hospitality Design Awards

BuroHappold who are world leaders in sustainable design are Piramal Aranya’s Lead Structural & MEP Consultants. This London-based firm was founded by the well-known Edmund Happold who before founding BuroHappold worked on projects such as the Sydney Opera House and the Pompidou Centre, Paris

EDSA who are the lead landscape architects for Piramal Aranya and have worked in almost 100 countries across the globe creating sustainable places to live, work, learn and play. Some of the projects EDSA has worked are the Dubai Opera House, Atlantis, Paradise Island in the Bahamas their legacy has grown in stature to one of the world’s most renowned landscape architecture firms

To ensure that the customer has peace of mind, a purchased unit can be returned to Piramal Realty, no questions asked, at 95 percent of the market value any time until possession. It is a concept that is unique in the real estate sector and is testimony to our belief in the quality of our homes.

Project highlights:

• Spread over 7 acres in metropolitan Mumbai, Piramal Aranya will be approximately 70-storey high 
• Spectacular views on both sides: overlooking the 60 acre lush botanical garden on the west and the animated Mumbai Harbour on the east
• With a construction area of 3.7 mn square feet, it is set to be one of the tallest and most significant developments in Mumbai
• Over the lifecycle of this project, Piramal Realty will invest INR 4300 crores for its signature project and employ over 2000 people directly & 10,000+ people indirectly
• In this launch phase, the luxurious residences range from 1700 square feet to 2600 square feet (carpet area), priced INR 8 crore upwards
• International project partners include: Make Architects – UK based Principal architects, Hirsch Bedner - UK for interior design, BuroHappold - for structure and MEP design and EDSA - landscape architect 
• Plush indoor amenities such as Gym, Spa, Table Tennis, Squash Court, Badminton Court, Mini Movie Theatre, Library, and Café
• Superior design features that offer natural light and ventilation, noise reducing double glazed windows and natural building materials

Branded luxury homes for India's super-rich

In India, the concept of branded luxury homes is only two or three years old. Growth of this segment could be pegged at roughly 5-6% per annum, owing to the fact that it is a very exclusive niche category with a restricted number of buyers, says Anuj Puri, Chairman & Country Head, Jones Lang LaSalle India. 

The basic premise behind branded residences is that the developers of such projects tie up with international luxury hospitality or lifestyle brands to create unique and highly differentiated offerings. As in all new business segments, there was no specific pre-existing demand for such homes - the mind-set of the target audience first needs to be primed to create demand, as supply will only follow demand. This process is happening with a fair degree of success in cities like Mumbai, Pune and Delhi NCR. 

Branded luxury homes bring various advantages beyond a designer label and location with them. They boast of professionally designed interiors and exteriors, highly evolved, centralized facilities management and various additional features like concierge services, high-grade electronic surveillance and security and valet parking. These factors have high appeal value, especially to buyers who have seen such homes abroad and aspire to live at such levels.

Branded luxury homes are targeted at that segment of India’s super-rich that prefer the conveniences and status value of luxury homes designed, marketed and often managed by international hospitality or signature designer brands. 

Developers of branded luxury homes are generally happy to provide personal customization to their buyers as long as these customizations do not detract from the overall project specifications, aesthetics and integrity.

The overall share of luxury homes in the Indian real estate domain would not exceed 6-7%, depending on how 'luxury' is defined in various markets. In industry terms, we define 'luxury' housing as homes costing Rs. 4-5 crore, while homes with ticket-sizes of around Rs. 1-1.5 crore fall in the premium or high-end segment.

The branded residences segment is not without challenges. These would include a limited buyer segment, finding the needed land parcels within high-prestige locations, providing the required infrastructure to adequately supplement the overall luxury experience - and, of course, getting the right brands to come on board in the first place. The latter factor is by no means without challenges, since international designer labels – by their very nature - have very high brand standards which a proposed project must demonstrably be able to live up to. 

The fate of branded residences as a property investment segment still hangs in the balance. From the churn point of view, selling mid-income housing is easier than high-end or luxury homes since a larger base of the population falls in the mid-income category. The sale velocity is higher and the sales cycle is also shorter, with mid-income housing projects usually being sold with 3-4 months of their launch. 

In comparison, high-end apartments and luxury homes often take more than six months to sell. As already mentioned, the bulk of demand for residential properties in India lies in the budget / mid-income category and comes from buyers who can avail of ready bank funding. 

Though buyers of ultra-luxury housing such as branded residences are not dependent on such considerations by virtue of their existing networth, it also means that the pace at which the branded luxury housing segment will grow depends on the pace at which India's macro-economic environment is able to produce such individuals. 

Robust growth for hospitality sector: NCR, Mumbai to give 27000 keys by 2008

 Chennai: Braving the economic slowdown, the hospitality sector in Mumbai and Delhi-NCR together will produce 26,970 keys in the next three to five years.

According to ‘Asia Hotels View 2014’ by Cushman & Wakefield, the world's largest privately owned real estate firm, over the next three to five years Mumbai will have 5,919 additional hotel rooms, while NCR will give 18,064 keys.

Expansion in NCR will see the presence of brands such as JW Marriott, MGM Aloft, St. Regis, Conrad Hilton, Radisson Blu, Ibis and Lemon Tree, while for Mumbai, JW Marriott Sahar Airport, Conrad Hilton in Juhu, Radisson Blu in Powai, IBIS in CST Mumbai and Lemon Tree are some of the possible addition in the coming months.

Akshay Kulkarni, Regional Director of Cushman & Wakefield's Hospitality sector group across South Asia and Southeast Asia said, “He further adds, “There seems taken comparatively higher growth in demand in the NCR region against Mumbai and while the inventory in NCR is higher than in Mumbai, occupancy shows growth because there is pent up demand being captured by the unorganized sector, which will move to the branded section in NCR. The delay in the inventory coming in NCR is also going to support growth of ADR. In 2014, the second half should see improved business activity as well as inbound travel due to elections and stabilization of global financial health. Improved perception of safety and security and stabilize political climate should also benefit in enhanc­ing the business volumes.”

Mumbai

As of 2012, the total organised inventory accounted for over 14,000 keys. The inventory is primarily dominated by the luxury segment with 33%, followed by 26% in the mid scale segment, 21% in the budget segment, 12% in the upper upscale segment and 8% in the upscale segment. Five new hotels opened for business in 2012, adding a total of 1,193 keys to the existing room supply, namely Sofitel Mumbai in BKC with 300 keys, Shangri-La (to be rebranded) in Lower Parel with 390 keys, Ginger in Andheri with 116 keys, Country Inns and Suites with 94 keys, and Ibis and Royal Tulip in Navi Mumbai with 196 and 97 keys, respectively. 2013 has seen the introduction of only Residency Sarovar Portico in Malad with a total of 71 keys. The majority of the demand is driven by the business and transient segment, with an almost 70% share of total demand. In 1H 2013, Mumbai’s occupancy is estimated to have increased by 2 percentage points to 65% over.

The year 2013 is set to see some major infrastructure facilities transform Mumbai. In particular, the new airport terminal is expected to start operations soon and should be able to handle up to 40 mn passengers annually. Further improvements include the proposed Mumbai Metro, which is expected to be operational beginning with Line 1 (Versova-Andheri-Ghatkopar Corridor) by October 2013.

Hotel supply increased in 2013 and is set to continue to grow in 2014. Next year, we would expect to see major additions to the city’s hotel inventory, such as JW Marriott Sahar Airport with 525 keys, Conrad Hilton in Juhu with 275 keys, Radisson Blu in Powai with 335 keys, IBIS in CST Mumbai with 196 keys, and Lemon Tree with 298 keys. With further increases in supply, ADR and AOR are likely see a drop in the short-term. In fact over the next three to five years Mumbai will have 5,919 additional hotel rooms. The average occupancy rate will be 61% while the average daily rate will be Rs 8,906 approximately

NCR

NCR currently has over 23,500 units in the organized and unorganized segments, combined. Seventy-five percent of total units are in the organized sector. Micro-market wise, NCR has 65% of its total organized inventory in Delhi, 21% in Gurgaon, 5% in Noida and Greater Noida, 3% each in Manesar and Ghaziabad, and 2% in Faridabad. In 2012, the total inventory went up by 9%, that is, approximately 1,500 units entered the market last year. 

Prominent new entrants were Park Plaza by Sarovar Hotels and Kempinski Hotel in Delhi, Pullman Hotel and Double Tree by Hilton in Gurgaon, Radisson Hotel in Ghaziabad and Savoy Suites in Manesar.

Of the total NCR hotel inventory, the luxury segment contributes the highest share of about 34% of the total inventory, followed by midscale with 30%, upscale with 16% and upper upscale with 12%. The budget segment has the least contribution, amounting to only 8% of the total inventory. 

NCR has a robust pipeline of upcoming hotels with approximately 18,000 keys expected to enter the market over the next five years. The majority of this new supply is expected to be in Delhi (34%), given the development of the Hospitality District near the international airport. 

The opening of a number of new hotels in this area has been delayed by a few months because of safety and security concerns raised by the Airport Authority of India (AAI). Noida has a share of about 25%, Gurgaon with 21%, Greater Noida 13%, Manesar 4%, and Faridabad 3% of the total upcoming supply in the NCR.

Historically, NCR has been a lucrative market for most hospitality players, which can be ascertained by the quantum of inventory – existing and upcoming. The Hospitality District at DIAL 12 will have an influx of fresh inventory in NCR in the second half of 2013, after obtaining clearance from the AAI. A total of over 4,200 keys are expected to open in the next five years in the Hospitality District alone.

Delhi, the capital city of India, has outgrown its boundary as an agglomeration to its suburbs to accommodate its increasing population and livelihood. However, the demand of hospitality accommodation remains strong in the prime areas in the city. As the availability of land continues to be a constraint in these areas, this has triggered hotel development in micro-markets like Noida, Gurgaon and Faridabad.

ADR and AOR might experience further decreases in 2013, given the economic instability in the light of the impending General Elections due in 2014, coupled with the strong pipeline of new hotel inventory entering the market. The stiff competition, together with lower AOR, is likely to put downward pressure on ADR this year. 

With such a scenario, budget and midscale segment hotels are likely to perform better than the upper upscale and luxury hotels, given their flexibility to play in a lower price segment. In fact over the next three to five years NCR will have 18,064 additional hotel rooms. The average occupancy rate will be 61% while the average daily rate will be Rs 8,906 approximately.

Despite the recent rout in Asian financial markets and cuts in GDP forecasts, long-term growth prospects for Asian economies remain structurally healthy and a repeat of the 1997 financial crisis is unlikely. Market-wide Asian hotels have had positive RevPAR growth in 2012, although at a slower pace compared to 2011. So far in 2013, hotel performance remains a mixed picture of growth, consolidation and decline in different markets.

Investor's Guide to Pune Real Estate

When it comes to investment in Pune real estate, smaller investors do not enjoy the same bouquet of options as their institutional counterparts. While the latter category of investors can afford to handle portfolios consisting of many properties, smaller investors are limited by the fact that lending institutions will usually not anything over and above a second home loan.

The RBI has imposed these restrictions because it is trying to curb speculation - which is the opportunistic purchase and disposal of properties (also known as 'flipping' in markets like the US). This is justifiable, since speculation has, in the past, been the main cause of driving up prices unrealistically in many cities such as Mumbai, Chennai, Bangalore, Delhi NCR and Pune is no exception to this trend.

Of course, smaller investors can still use their personal funds to invest in more than one property. Where this is possible, such investors tend to plug their funds into rent-generating properties which, depending on their choice of location and project, will potentially yield good, regular income, says Kishor Pate, CMD of Amit Enterprises Housing Ltd.

Is this is wiser option that investing limited funds in gold or the stock market? It certainly is. Investment in a well-chosen residential property in Pune is a perfect way to counter inflation. Neither gold nor real estate relinquishes their intrinsic market value. But while gold does nothing but sit in the bank locker or the home safe while it appreciates, a residential property bought for investment will earn the owner rental income even as it appreciates.

If the market dynamics in the chosen location are favourable, the rental come on the property will increase in line with the growing demand for rental properties there.

 Guidelines to real estate investment

• The first factor to be considered while purchasing an investment property in Pune is location. Pune is a diverse market, and it is possible to get confused by the multitude of options available. Depending on one's budget, one can consider luxury housing in established locations and premium or budget housing in upcoming locations. There are two main criteria for making the right decision - the property needs to be either centrally located, or located close to one of Pune's IT or non-IT commercial hubs.

• The second factor to look out for is the legal sanctity of the project. The investor must be sure that there are no litigations or documentation shortfalls involved - either on the project or on the plot on which it has been built.

• The third important factor is the right point at which to invest. Many lay investors prefer to wait indefinitely for prices to fall. However, the fact is that the demand for residential property in the most lucrative locations of Pune is only going to rise. Waiting for the 'magic price point' will invariably mean missing out on very good options which were affordable at one time and will be too expensive to invest in a year or even a few months down the line.

• The fourth factor is how long one intends to stay invested in the property. The minimum period required for avoiding capital gains tax is three years, but certain locations will require a longer time to gain sufficiently in capital value for profitable resale. An investor must know when the right time to sell the property comes around. In Pune, a well-chosen property will continue to gain in intrinsic value as well as rental income generation potential. The temptation to exit and make a tidy profit may be strong at times, but it may make more sense to defer such a decision for yet a while longer.

• The fifth factor is the professionalism and credibility of a developer on Pune's residential real estate market. Even with all the above factors attended to, the fact is that many good investment projects in Pune are still under construction. The developer should have a good record for time-bound project completion. The investor should ensure that he is not dealing with an obscure, unscrupulous and potentially under-funded developer or else the investment could turn into a nightmare situation.

Lebua Hotels plan four luxury properties in India

New Delhi: Thailand-based luxury hotel chain Lebua Hotels and Resorts in on expansion mode in India with four luxury properties in biggest cities in the next two years for an investment of about Rs.2,000 crore.

Speaking to reporters Deepak Ohri, chief executive, Lebua Hotels, said, “Since we have started the management of three properties in Rajasthan, we expect a strong bottom line that will help the company grow in the country.”

The company has three properties operational in Rajasthan with a total room inventory of 140. The four properties planned for Delhi, Mumbai, Bangalore and Goa will take Lebua’s total number of rooms to 1,500, Ohri said. The expected investment per room is around Rs.2 crore. Of the four properties, three are new projects.

Lebua has six luxury properties in three countries—Thailand, New Zealand and India.

The company plans an air charter service under the Lebua brand in the next three months in all three countries. To begin with, the hotel operator is looking at three chartered planes.

“We will start Lebua Air in the next 90 days which will cater to all our properties across the three countries,” said Ohri. Industry analysts said small foreign hospitality companies may face hurdles in the short term.

“Currently, the industry is facing a liquidity crunch that may force many developers to stick with their core business area of real estate, so we may see more of these deals falling through, but it will be a short-term scenario,” said Chintan Patel, director, real estate and hospitality services, Ernst and Young.

No more mala-mall for India

Over 55% of the malls in Delhi-NCR region are vacant partly due to economic slowdown, poor designing, lack of robust revenue generation model and located in unattracted location, reveals the Associated Chamber of Commerce and Industry of India (ASSOCHAM) recent survey.

As per ASSOCHAM estimates, the total rate of vacancy in malls in Delhi-NCR is 55%, while in Mumbai it is 52% followed by Ahmedabad (51%), Chennai (50%), Hyderabad (48%), Bangalore (45%) etc. The position in the nearby town of these locations is much disturbing. 

ASSOCHAM conducted a random survey of all the shopping malls in Delhi-NCR, Mumbai, Kolkata, Bangalore, Hyderabad, Ahmedabad, Pune, Dehradun, Chennai etc between October and December 2012. The survey found that many upcoming malls have significantly been delayed and withdrawn due to lukewarm response from retailers. They will also face manifold hike in construction cost.

Commenting on the malls scenario, ASSOHAM Secretary General D S Rawat said that vacancy levels are due to poor location, poor design and poor parking facilities while some are operating at 60% occupancy others are struggling at less than 20% occupancy. The occupiers are finding difficult to manage economically.

The survey also highlighted some of the challenges the industry is facing, which include inadequate infrastructure, unavailability of retail space, multiple taxes, lack of clarity in policies and shortage of experts in areas such as supply chain and store management. Now, they are shifting from lease/rentals models to revenue sharing models and this is encouraging large number of branding showrooms to open shops in malls.

“Biggest shopping mall can feel like a pretty lonely place, majority of retailers said that they are holding back on new store openings and focusing on existing stores,” adds the survey. 

The sharpest decline in mall rental values are also recorded high in Delhi-NCR by 60%, while Mumbai also dropped by 58% in rentals followed by Ahmedabad (55%), Chennai (54%), Hyderabad (52%), Bangalore (49%), Kolkata (45%), Pune (42%) and Dehradun (40%), points the ASSOCHAM survey.

Nearly 82% of the retailers said that they are shutting down some of stores in areas where rentals are too high, and with the slowdown in consumption complicating things further, point out the survey.

Nationally, the vacant rates of shopping malls are 55% and will likely rise to 70% by 2015, according to the ASSOCHM analysis. More than 90 percent of shopping in India is still done at unorganised one-off shops, adds the survey.

Sunil Kumar Dhaiya, Co-Chairperson of ASSOCHAM Real Estate committee also specialising in malls said that the real estate prices and construction costs are rising but the retail business is not growing enough to absorb this. There are just not enough footfalls.

Retail rents are down 60-65% from peaks in 2010 and that's especially painful for developers, when servicing loans is expensive at 12-13 percent interest," said Rawat.

Nearly 76% of the shop owner’s said that increasing rents will not work because at the end of the day it has to be affordable for retailers to do business and the fate of the retail realty segment is intertwined with the retail industry.

The retail sector is forecast to grow rapidly, but mall rentals and valuations are not rising in of most markets, added Rawat.

According to the ASSOCHAM estimates, rental values of malls remained stagnant across Delhi-NCR, Ahemdabad, Mumbai, Pune, Chennai and Kolkata in the October-December 2012 quarter. However, certain micro markets in Ludhiana, Indore witnessed a growth over the quarter in the range of 10-15%.

There are approximately 1,200 shopping malls in India, the growth in the retail sector has driven a mall building boom across the country, with the total number of malls expected to increase to 1,500 by 2015 from 1,200 in 2012," added the ASSOCHAM report.

The malaise of high vacant malls can be seen in micro markets, such as Ghaziabad, Noida and Gurgaon, where retail has not picked up. Clubbing this with the fact that spending was really low, the demand for malls is likely to remain dull for the coming next 2013, commented Rawat.

The survey adds demand for mall space across most micro markets remained slow because of lack of fresh supply, conservative approaches from retailers and overall slowdown in consumer demand. Slowdown in retail demand in many micro markets has led to rental values either remaining stable or correcting marginally in the range of 10 to 15% over the previous quarter.