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Rental costs for retail spaces in shopping centres in Chennai have remained flat over the past year, averaging Rs 43,808 ($717) per square metre per annum in the third quarter of 2013. In contrast, property prices in nearby Bangalore appreciated 0.1 per cent year-on-year to Rs 57,800 ($946) per square metre per annum in the July-September period of the calendar year, according to real estate consultancy firm Jones Lang LaSalle’s latest ‘The Retail Index’ report.
Delhi and Mumbai shopping centres have also seen retail rentals appreciate over the past year. In Mumbai, rentals rose 2.5 per cent between September 2012 and September 2013 to Rs 85,112 ($1,393) per square metre per annum, whereas rentals in Delhi increased 1.1 per cent to Rs 82,301 ($1,347) per square metre per annum.
Jones Lang LaSalle indicated that appreciation in rental costs in these metropolitan cities could see an uptick once some clarity emerges on the retail foreign direct investment guidelines. Once this occurs, foreign retailers are likely to make a beeline to set up shop in these cities, seeking to garner a slice of the country’s retail market, which is worth around $500 billion at present and poised to reach $1.3 trillion by 2020.
Among the Asia-Pacific cities covered in the report, mall rentals were the highest in Hong Kong, at a staggering $14,488 per square metre per annum. Rentals in Sydney, second in the list, stood at half this amount, at $7,180. Melbourne and Brisbane followed in third and fourth places. Guangzhou, China, was the fifth in the list.
Hong Kong is also the costliest space in Asia-Pacific to set up a High Street retail store, with rentals averaging $28,839 per square metre per annum on Russell Street. In comparison, rentals in Delhi’s Connaught Place were a modest $1,444 (Rs 88,288) per square per annum, weighing in at 10{+t}{+h} on the list. But locations like Delhi’s Khan Market and Mumbai’s Linking Road were conspicuous by their absence on the list, even though rentals in these prime shopping locations are considered to be the highest in the country and among the costliest in the world.
arvind.jayaram@thehindu.co.in
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