While New Delhi’s Khan Market is still the most expensive high street in India, the shopping streets of Mumbai are not looking so tony, with rentals in key areas declining, as per a report by global real estate consultancy Cushman & Wakefield.
According to the report ‘Main Streets Across the World’, well established Mumbai retail locations of Colaba Causeway recorded a rental decline of over 14 per cent in 2015, making it the highest decline in India last year.
Other popular locations such as Kemps Corner (-11%), Fort/Fountain (-6%) also saw declining rental trends. However, shopping hotspot, Linking Road in the western suburbs, saw no change in rentals, the report notes.
“In India, government opposition to foreign investment in multi-brand retail is hampering growth potential in the retail market – with little in the way of indicating that this will change in the near term,” said the report.
“Poor infrastructure and lack of amenities for shoppers and occupiers have been causing these locations to fall out of preference. Most locations are understood to have reached their threshold pricing and are seeing a lack of demand at existing rental values, thereby pushing these locations to recalibrate their rentals downwards,” it added.
Cushman & Wakefield’s Main Streets Across the World report tracks over 500 of the top retail streets around the globe, ranking them by their prime rental value utilising Cushman & Wakefield’s proprietary data.
The report also added that alternative locations such as Lower Parel and Kurla are preferred due to availability of quality space and growing catchment areas.
Vashi and Chembur in the western city’s northwest and northeast suburbs have, however, seen 14.8 percent and 9.4 percent rise in rental values YoY, as population with disposable income grew proportionately.
New Delhi and NCR have delivered a contrasting performance compared to Mumbai, Cushman said.
Delhi’s Khan Market did not see any change in rental values. It is the most expensive high street in India and was ranked 24th in Cushman’s global ranking, moving up two notches. Within the APAC region, it was the 10th most expensive retail location. Khan Market has remained the most expensive market in India for more than five years as demand for retail space has remained steady on account of its location and occupier profile.
“Despite witnessing no change in the rental values of the location, Khan Market gained in rankings due to marginal changes in the rankings of other countries in the rankings,” Cushman noted.
New Delhi and NCR accounted for the top four most-expensive locations with Connaught Place being second, DLF Galeria in Gurgaon 3rd and South Extension in New Delhi being 4th most expensive, the study said. All three markets recorded a year-on-year growth due to a increase in retail activities.
“Entry of new brands and expansion of existing brands have contributed to the growth in rental values of these locations giving them a fillip,” Cushman said. “These are established markets with long-standing interest from occupiers and consumers on account of tenant mix, accessibility and legacy. Thus, most brands have been working on establishing presence in these markets, despite rentals inching northward.”
Kolkata’ Park Street and Camac Street ranked among top 10 in the Indian retail market despite recording no change in rental values on account of robust retailer interest and a regular inflow of brands to their location.
“Significant new supply is expected for 2016 across Noida, Greater Noida, Gurgaon and West Delhi, which is likely to affect rental values,” the report concluded.