Connaught Place main street rentals increase by 12%; Noidsa’s mall rise 10%: Cushman & Wakefield

Track2Realty: NCR retail real estate market remained largely stable as per the latest retail report from real estate consultancy Cushman & Wakefield. A few locations in both main street as well as malls saw some appreciation in rental values. Connaught Place (Inner Circle) recorded an increase of 12% while prime malls across Delhi NCR saw a positively rising curve following robust demand for the same.

Prominent main streets of Delhi NCR like Connaught Place and Greater Kailash I, M Block markets witnessed expansion and entry of prominent international brands leading to a stable to upward rental trend in the rental values.

Due to healthy demand in Connaught Place, a sharp rise of 12% was witnessed over the previous quarter. The values in other markets remained stable with an upward bias owing to limited main street space availability.

Steady demand and expected churn is likely to push up the mall rentals in South Delhi and Gurgaon and main street rentals in Connaught Place (Inner Circle), South Extension I & II.

Driven by the interest from luxury retailers there were some significant few transactions in malls. Select quality malls in South Delhi and Noida witnessed rental appreciation.

Dearth of quality mall space and high demand caused a 10% q-o-q appreciation in Noida’s mall. South Delhi Mall space also registered a growth of approximately 2% in the same period owing to lease expirations and consequent churn in mall destinations.

Overall vacancy levels in malls dipped to 15.8% on account sustained leasing action in both main streets and malls. However, NCR was the only city to witness a marginal rise in mall vacancy level of about 1% over the quarter owing to increased in availability primarily in malls located in the peripheral locations. There was a deferment of approximately 500,000 sf of mall space in Delhi NCR now expected to be seen entering the market in the next few months.

Jaideep Wahi, Director, Retail Agency, Cushman & Wakefield India said, “Foray of international brands into premium malls and main streets is a trend that is here to stay in the Delhi NCR region. Superior quality retail options with ample visibility and considerable frontage in malls and main streets alike will see strong transaction activity. This will be responsible for escalating rentals in both main streets and malls. Transaction activity in niche segments like luxury and jewellery will gather further momentum. Food & Beverages segment is another segment to watch out for; organic growth is likely to happen not only in prime, but also upcoming locations.”

Nationally, there was only one mall of 1 million sq. ft. that got operational in Chennai while nationwide vacancy in mall spaces improved marginally by 1% over the last quarter. Activities were mostly concentrated on mall spaces rather than main streets due to non availability of quality space in the main streets.

This quarter witnessed the deferment of 5 malls amounting up to nearly 1.73 million sq. ft. with Chennai witnessing the deferment of 2 malls amounting to 530,000 sf.  While Pune witnessed the deferment of 1 mall of 700,000 sf mall space, NCR and Bengaluru witnessed the deferment of 1 mall each of 500,000 sf.

                                                                                          Source: Cushman & Wakefield

RETAIL RENTAL MOVEMENT IN DELHI NCR Q1 2013 (QUARTER ENDING MARCH 2013)

 

                                                                                          Source: Cushman & Wakefield