Branded stores push up rents in residential areas

Large residential localities in Bangalore have begun to attract big lifestyle brands and food and beverage (F&B) outlets.

Of late, branded stores have cropped up in residential areas such as Jayanagar, Koramangala, Indiranagar and Malleswaram.

“Due to demand for retail space by lifestyle/fashion retailers, rental values have increased by 26-28 per cent in one year,” said Ram Chandnani, Deputy Managing Director, South India, for CBRE, a real estate services firm.

Established high-street locations in Central Business District (CBD) areas also continued to witness small and mid-size transactions during the first-half of 2012, while retail rental values in CBD and other city areas were constant, with only a marginal increase in a few locations, he said. For instance, apparel brand Planet Fashion Grande has entered the city by leasing 15,000 sq ft of retail space in Indiranagar. Food & beverage brands such as California Pizza Kitchen and Mad Over Donuts have set up shop in Phoenix Mall and Trader Vic’s in the Orion Mall.

Demand for organised space is also keeping pace with retail in the city. Most of the malls in the city are fully occupied. Around 1.12 million sq ft of organised mall space was completed in the first-half of 2012.

According to Chandnani, in the organised mall market, rental values in East Bangalore (Whitefield location) saw an increment of about 5-7 per cent due to increase in demand for retail space. However, rental values have dipped by almost 12-14 per cent in malls at Outer Ring Road.

“A key reason for variation in rental movement between Whitefield and Outer Ring Road is the number of footfalls, due to varied shopping options that malls in Whitefield offer compared to those along the Outer Ring Road,” he said.

COMMENT NOW