“There was a market correction in select mall developments in micro markets of Pune, Chennai and Hyderabad,” stated a recent study by CBRE South Asia, a global property consultant.

The report on the Indian retail market between July-December 2011 points out that the key reason for drop in mall rentals compared to the same period in 2010 has been due to the falling sales and declining footfalls.

The drop in sales has been largely attributed to an unfavourable tenant mix and poor infrastructure facilities in these malls.

According to Cushman & Wakefield, Ahmedabad has seen rentals depreciate by 7 per cent compared to those that existed in October-December 2010.

“The retailers are the ones putting a downward pressure on the rents. Every retailer wants to enhance their profitability, and more so in tough economic conditions,” says Anshuman Magazine, CMD, CBRE South Asia Pvt Ltd.

In contrast to Pune, Chennai, Hyderabad and Ahmedabad, retail hot-spots like NCR and Bangalore witnessed an appreciation in rentals that were as high as 15 per cent.

Certain micro-markets in Mumbai saw rentals rise as high as 20 per cent between July-December 2011, stated the report.

On the other hand, Pune saw rental values dip by 5-6 per cent across the Eastern corridor of Nagar Road, Koregaon Park, Bund Garden Road.