The Hindu Business Line : Retail buzz on the rise in Chennai

CHENNAI faces a shortage of quality retail space with good signage but still attracts high-powered brands and national retailers because of the relatively low cost of real estate as compared to other metros, according to a study by Trammell Crow Meghraj, formerly Chesterton Meghraj property consultants.

Information technology has been the driving factor for the increase in real estate activity.

In the commercial sector, more than 11 million sq.ft of A-grade space is being added in the next two years. Two malls under construction will add about eight lakh sq.ft of retail space in the city. The existing malls in Chennai are reporting high footfalls due to congestion in prime shopping areas such asPondy Bazaar and Purasawakkam.

More malls: By the end of 2007, it is expected that at least two to three malls-cum-multiplexes would come up along East Coast Road (ECR), which has evolved as a prime entertainment destination of Chennai. Three malls are likely to come up along the Old Mahabalipuram Road (OMR), which has potential for retail and residential space due to increased IT activities, the study said.

Other than these, in the developing residential areas such as Velachery, Mogappair and Korattur, three to four malls are likely to come up. Other potential areas for retail development are along GST road and the Bangalore Highway.

By early 2011, Chennai is likely to have at least 12 to 15 malls with multiplex catering not only to high-end segment but also to other middle-income groups, the study said.

Retail areas: Retail activity in Chennai is primarily concentrated in and around Nungambakkam, Cathedral Road and T Nagar. Some other prominent retail areas are Anna Nagar, Adyar, Besant Nagar, Purasawakkam and Mylapore.

The majority of the silk and jewellery retail is in T Nagar. Most of the new brands put T Nagar at the top for showroom space, though lately the area has become too congested and there is no quality space available for new players. According to the study, the rental rates in Pondy Bazaar are between Rs 50 and Rs 70 per sq.ft, North Usman Road Rs 30 - 60 per sq.ft and G.N. Chetty Road Rs 30-45 sq.ft.

High rates: On Nungambakkam High Road besides branded stores such as Reebok, Samsonite and Land Mark, Ispahani Centre with 54,000 sq.ft has a mix of retail and office space. The most recent entry on this road is Marks & Spencer. The rates are higher on Khader Nawaz Khan Road, which connects Nungambakkam High Road with Greames Road and is a much sought after retail location with rates touching Rs 70-75 per sq ft, the study said.

Residential areas like Alwarpet, Cathedral Road and RK Salai are fast developing into up-market retail destinations.

The rentals on TTK Road are between Rs 30 and Rs 50 per sq ft and on CP Ramaswamy Road between Rs 25 and Rs 40 per sq ft. The rentals on RK Salai are between Rs 65 and Rs 75 per sq ft while rates on Cathedral Road Rs 60 - Rs 80 per sq ft. Levi Strauss is planning four exclusive Signature showrooms in the city.

More demand: Second Avenue in Anna Nagar is buzzing with high street retail activity. Space is becoming scarce and demand increasing. This location serves the western part of the city and has a price range between Rs 65 and Rs 70 per sq ft.

Besant Nagar is also growing in retail activity on the Second Avenue.

Purasawakkam caters to the mid-segment, in the northern part of the city. This is a congested market place with small retail in linear fashion on the main road.

These high street locations have flourished in the recent years due to the lack of any good organised malls in the city.

The Spencer Plaza, which started with a built up area of 3,00,000 sq ft, has now become the mega mall of city with 1.05 million sq ft. The pricing has gone up from Rs 18 to Rs 22 per sq ft per month in 1991 to the current Rs 60-100 per sq ft per month.

The mall nearing completion is the Chennai Citi Centre on RK Salai, promoted by the ETA group.

It covers 3 lakh sq ft, out of which 2 lakh sq ft is for shopping and multiplex theatre. The remaining 1 lakh sq ft is for office space. Anchor tenants in this mall are Lifestyle and INOX Multiplex.

The second mall being developed is the Ampa Mall on Nelson Manickam Road, with 4-lakh sq ft built up area, with a retail area of about 3 lakh sq ft.

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