Retail rentals show downturn in Metro cities
Retail rentals in high street locations and shopping malls dropped in most metros in 2008, as retailers, plagued by lower sales and high cost, turned cautious on expansion and closed down several unviable stores.
By sanjeev, ET Bureau |
NEW DELHI: Retail rentals in high street locations and shopping malls dropped in most metros in 2008, as retailers, plagued by lower sales and high cost, turned cautious on expansion and closed down several unviable stores, as per a report by property consulting firm Cushman & Wakefield. The report predicts a further drop in rentals in 2009.
The high streets of Mumbai, which had seen an appreciation of 100-156% in Q1 2008, was the worst hit. Rentals fell sharply in Linking Road (-44%), Kemps Corner/Breach Candy (-41%) and Colaba Causeway (-38%). Mall rentals dropped 20% in Vashi, 17% in Goregaon and 14% in Mulund. Mumbai registered a mall vacancy of 10%, as 2 mn sqft of fresh
retail space entered the market.
Delhi NCR, which saw 24% vacancy, the highest in the country, too registered massive correction in retail rentals. While rentals in Connaught Place, Karol Bagh and Basant Lok declined 16%, the fall was marginally lower in Khan Market at 14%.
West Delhi, which has seen a proliferation of malls lately, witnessed a 27% fall in mall rentals. The decline was 12% in South Delhi and 22% in Noida. Rentals in Chennai, Hyderabad and Bangalore fell by 33%, 29% and 28% respectively.
"Lower or negative revenue growth over last year on same store basis and high rental costs of the stores added in 2007/08 have forced retailers to re-look their portfolio.
The high streets of Mumbai, which had seen an appreciation of 100-156% in Q1 2008, was the worst hit. Rentals fell sharply in Linking Road (-44%), Kemps Corner/Breach Candy (-41%) and Colaba Causeway (-38%). Mall rentals dropped 20% in Vashi, 17% in Goregaon and 14% in Mulund. Mumbai registered a mall vacancy of 10%, as 2 mn sqft of fresh
retail space entered the market.
Delhi NCR, which saw 24% vacancy, the highest in the country, too registered massive correction in retail rentals. While rentals in Connaught Place, Karol Bagh and Basant Lok declined 16%, the fall was marginally lower in Khan Market at 14%.
West Delhi, which has seen a proliferation of malls lately, witnessed a 27% fall in mall rentals. The decline was 12% in South Delhi and 22% in Noida. Rentals in Chennai, Hyderabad and Bangalore fell by 33%, 29% and 28% respectively.
"Lower or negative revenue growth over last year on same store basis and high rental costs of the stores added in 2007/08 have forced retailers to re-look their portfolio.
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The year saw retailers beginning to resize stores, renegotiate on rentals and even exit from locationswhere operations became unviable," said Rajneesh Mahajan, Director of Retail Services at Cushman & Wakefield.Start a SIP with as low as ₹500 with ET Money App!
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