Linking Road in Mumbai is the most expensive retail destination in India. However, when compared in Asia, it is the fifth most expensive location. Meanwhile, the road extending from Bandra to Santa Cruz is also among the top three locations across the world witnessing highest annual growth in rental values with an increase of 100 per cent between June 2007 to June 2008. These facts are based on Cushman & Wakefield’s (C&W) 23rd annual report.
According to the report, India has further emerged as the 17th most expensive retail high street.
The report is based on a survey conducted in the middle of 2008 across 236 locations in 48 countries across the world.
Colaba Causeway, Mumbai, showed the strongest annual growth in the world with rents rising over 182 per cent as on June 2008. India occupied 6 out of 10 positions in Asia in terms of annual growth of rental values. Linking Road and Fort/ Fountain both tied at second position with 100 per cent growth over June 2007. Kemps Corner in Mumbai with 93 per cent growth, Khan Market in New Delhi with 40.5 per cent and Karol Bagh in New Delhi again with 37.5 per cent growth picked fourth, eighth and tenth positions respectively.
Explaining the steep rise in rents, Rajneesh Mahajan, director – retail, C&W India, said: “The substantial increase in main street rents was driven by demand from existing retailers upgrading and expanding their space to create flagship stores. Demand was further buoyed by the entry of new international and domestic retailers.”
The first half of 2008, however, witnessed rental stability across most micro markets with rents peaking, thereby increasing pressure on store sustainability, he added.
According to the report, the third quarter of 2008 has been significant for the retail real estate sector as for the first time in the recent past many established locations saw correction of values both in malls as well as high streets.
“The rentals in most of these locations have grown faster than the business potential in the last couple of years thereby impacting the rental sustainability. Though they are positioned high in the world ranking of main streets as on June 2008, Linking Road, along with other Indian markets have been impacted by the developing market pressure in 2008 and have seen rental prices correcting upto 20% in the 3rd quarter of 2008, said Mahajan.