The city of Mumbai witnessed the highest rental growth globally. Colaba Causeway in Mumbai recorded a rental increase of 75 per cent over last year, on the back of strong retailer demand and continuous preference for prime high street properties in the city.
Park Street at Kolkata recorded an increase at 53.8 per cent and Chennai’s Khader Niwaz Khan Road was placed at 36.7 per cent increase, and were among the global top ten cities to register highest annual rental growth, according to the annual report by global real estate consultants, Cushman and Wakefield.
In the global ranking of most expensive retail locations, Khan Market in New Delhi has emerged as the 26th most expensive place in the world, retaining its position as most expensive retail location in India.
India however, dropped in the global ranking from 21st to 26th position due to the weakening of the rupee against the US dollar. Hong Kong’s Causeway Bay overtook New York’s 5th Avenue as the most expensive retail location in the world.
Khan Market in New Delhi recorded the highest rental values for the year in India at approximately Rs 1,225 per square foot a month, a marginal increase of 2 per cent over the previous year.
This main-street has always been India’s most prime retail location, due to the advantage of being situated in the midst of the premium residential boulevard of the capital city. With many major international and national retail brands being present in Khan Market, little vacancy and consistent demand have kept the values high in this location, the report noted.
Sub-sector demand
Speaking about the report, Jaideep Wahi, Director Retail Services, Cushman and Wakefield said, “Traditional high streets across India have been witnessing renewed interest from retailers thereby keeping rental values high in these locations. Additionally, the possibility of a boom in global retailers in India, existing global brands have been showing urgency to occupy prime retailing locations. Thus prime retailing locations of Mumbai, Kolkata and Chennai have recorded high growth in rental values in the last year.”
The report added that prime rents in India rose by 12.5 per cent on the back of strong occupier demand across all sub-sectors, however, retailers increasingly favoured high street properties evidenced by the significant rise in rental values.
Khan Market was followed by Mumbai’s Linking Road (in the Western suburbs) which recorded a rental value of Rs 850 per square feet per month.
Traditionally high demand retail locations continued to see growth such as Mumbai’s Colaba Causeway, Kolkata’s Park Street and Chennai’s Khader Nawaz Khan Road recording high rental growth over the previous year, primarily driven by large volumes of footfalls that these locations attracted which has led retailers to seek out any available space in these areas.
Rental values in shopping centres across the major seven cities rose over the year to June 2011, the report added, with the exception of selected Bengaluru locations where values declined due to the continuous infrastructure development in the area and the steady expansion of the city’s population to other locations.
High streets rents in Kolkata, Bengaluru, Pune and Gurgaon recorded and appreciation in the range of 7-20 per cent as compared with 2012-11.