With COVID-19 wreaking havoc in the country, average monthly rentals across the key high street markets in top cities witnessed some corrections. As per recent data by ANAROCK Research, the iconic retail hub in Delhi – Khan Market – saw average monthly rentals reduce by as much as 8% to 17% in Q1 2021 against Q1 2020.
Likewise, high street markets of Kala Ghoda, Bandra Linking Road and Fort in Mumbai (one of the worst-affected city) also saw high street retail rentals decline anywhere between 5% to 10% during the same period.
”Retail sector has been one of the worst affected due to the pandemic since early 2020. With almost zero sales amidst lockdown and thereafter as well for few months, we saw retailers closing their stores or even curtailing their future expansion plans. As a result, the average monthly rentals across the major high street retail markets mostly saw corrections across cities. However, there were also few markets that saw an upward trend. For instance, Hyderabad localities such as Gachibowli, Banjara Hills, Jubilee Hills saw average retail rentals increase in Q1 2021 against Q1 2020,” says Pankaj Renjhen, COO & Joint MD – ANAROCK Retail.
“Considering the trends of the previous two quarters, the retail segment seemed to be on the verge of recovery and was gradually inching towards the pre-pandemic-level business. However, the second wave has once again crimped this growth,” he adds.
In an overall trend, many of the prominent high streets in the country saw reduced monthly rentals over the last one year.
High Street Rental Trends in Top Cities
Almost zero sales seriously impacted the retail sector during the first lockdown. Soon thereafter, many retailers closed down their stores permanently or a the very least curtailed their expansion plans.
Given this sombre scenario, the average monthly rentals across major high street retail markets began correcting by anywhere between 2% and 30%. However, some markets saw an upward trend in the same period:
- The country’s most expensive retail hub – Khan Market in New Delhi – saw a drop of between 8-17% in avg. monthly rentals in Q1 2021, as against Q1 2020. The avg. monthly rentals hovered b/w INR 1,000-1,100 per sq. ft. as on Q1 2021-end. Likewise, in GK-1 M Block, rentals reduced between 13-14% and are presently b/w INR 300-350 per sq. ft.
- Brigade Road in Bengaluru saw a drop in rentals between 8-17% in Q1 2021 as against Q1 2020 with current avg. monthly rentals between INR 250-275 per sq. ft. At Indiranagar, the rentals range between INR 225-250 per sq. ft.
- Another highly impacted city was Pune where average high street monthly rentals dropped anywhere between 8-20% in Q1 2021 in comparison with Q1 2020. While M G Road saw rentals maintain status quo of INR 250-275 per sq. ft., the landlords on J M Road are also holding the rents at INR 275-300 per sq. ft. despite vacancy.
- Kolkata also saw a decline in its high street rental rates, Gariyhaat Rash Bihari Avenue being the worst affected in the city with rental rates dropping to INR 160- 220 per sq. ft. in Q1 2021 from INR 250-260 per sq. ft. in Q1 2020.
- Mumbai saw about 5-10% decline in rentals rates in key markets as on Q1 2021 against the previous year. The current average monthly rentals at both Kala Ghoda and Fort area are around INR 450-500 per sq. ft. each, while at Bandra Linking Road it stands at approx. INR 750-900 per sq. ft.
- In contrast to all major cities, Hyderabad saw an increase in average high street rental rates in areas like Gachibowli, Banjara Hills and Jubilee Hills as much as 7-15% during this period. The avg. monthly retail rentals in Gachibowli are now at INR 115- 125 per sq. ft. Last year, they were INR 100- 120 per sq. ft. In Banjara Hills 12, the avg. monthly rentals increased from INR 120-130 per sq. ft. in Q1 2020 to anywhere between INR 135-140 per sq. ft.