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Sealing, demolitions push up mall prices

Sharma had a showroom in MG-I on the Delhi-Gurgaon road, the hub of fashion stores that was demolished by MCD in February.

india Updated: Aug 31, 2006 08:48 IST

Alarmed by the sealing and demolitions of unauthorised buildings in the Indian capital, top retailers are shifting to upcoming malls, leading to a sharp rise in property prices and rentals.

As the Municipal Corporation of Delhi (MCD) pushed by a Supreme Court order, prepares to seal over 45,000 commercial buildings operating in residential areas, a good number of fashion designers are preparing to shift out of their existing business locations.

"We have paid three times the price to find a suitable place in a mall after we had to vacate our shops because of the demolitions," said Abhinav Sharma, a leading name in fashion design.

Sharma had a showroom in MG-I on the Delhi-Gurgaon road, the hub of fashion stores that was demolished by MCD in February.

Earlier, he used to pay around Rs 60,000 a month as rent for the MG-I showroom but now has to shell out around Rs 200,000.

"The prices have gone up because there are not many good places where designers can start a showroom, so we are being charged hefty prices for the space," he said.

Taking note of the demand for high-standard malls, especially after the continued sealing and demolitions, real estate developers like the DLF Group are constructing swanky malls along the Delhi-Gurgaon road, which could see a second life as the fashion destination of Delhi.

"We are constructing a mall on the MG road as it was the centre of Delhi's fashion industry. Though the mall is under construction people have booked space at a rate of Rs 175 per square foot," said a DLF manager who did not want to be named.

Agreeing that property prices have gone up steeply in the capital, mall developers say the trend would continue for a while.

"We are charging Rs 150 per square foot area for rent and Rs.500,000 per square foot in case of lease," said Aarti, senior manager of East Delhi Mall.

On their part, MCD officials are preparing to start the process of re-sealing and demolition once again.

"Talks have been going on with Delhi Police as we suspect people might try to interfere in our work," said one MCD official.

The process had been stopped in May after the central government enacted the Delhi Laws (Special Provisions) Act seeking to halt the demolition and sealing drives in the national capital.

However, the Supreme Court Aug 10 ordered the resumption of the drive. The court stayed the urban development ministry's notification that directed de-sealing of the sealed premises and allowed those that had given an undertaking to stop the commercial activity by June 30 to continue it beyond that day.

The sealing drive had been undertaken following an order of the court to put a stop to the misuse of residential properties for commercial purposes.