Despite this, retailers rushed to open stores at both high streets and malls last year amid a revival in offline retail sales.
Bengaluru saw the highest increase in rentals in 2022 backed by strong demand but low availability of quality space.
In Bengaluru, retail hubs such as Brigade Road, Commercial Street and Vittal Mallya Road in central Bengaluru, Indiranagar in the east, and Koramangala, HSR Layout and Jayanagar in south Bengaluru have reported high growth.
Delhi’s Khan Market also reported rental growth both quarter on quarter and year on year during October-December 2022.
“This strong demand indicates that retailers will rush to open stores and the expansion will continue to happen in the sector,” said Anshul Jain – head of APAC tenant representation and managing director, India and Southeast Asia, of Cushman & Wakefield.
Samsung recently opened its largest premium experience store in North India at Connaught Place in New Delhi while Japanese retailer Uniqlo had also recently opened a store at Connaught Place in the heart of the capital. In Delhi, about 100,000 sq ft of retail area was leased during the December quarter and majority of the activity was observed in high-street locations such as Khan Market, Defence Colony, and Greater Kailash.
Accessories and lifestyle segment along with wellness accounted for a majority of the main street leasing in Delhi-NCR during the quarter. Petcare product and grooming store Zigly opened stores in Punjabi Bagh and Green Park while Canadian coffee chain Tim Hortons also expanded. “Retail real estate has been exhibiting a continuous pattern of growth, reinforcing the rebound momentum which is likely to get further traction,” Jain said.
In Mumbai, mall and main street rentals largely remained stable and further appreciation is expected in the upcoming quarters. With the low vacancies across superior retail malls and limited new supply, mall rental values are also expected to witness improvement, surpassing pre-Covid levels in upcoming quarters.
