Even while office and other commercial ventures may have taken a beating, the food and beverage (F&B) segment has been driving retail demand as well as rentals in Ahmedabad. According to developers, while demand from other segments may have trickled down, F&B has been sustaining their business.
"It is the only segment alive and kicking. F&B has been bringing in sustainability in our sales and occupancy numbers every quarter in recent times," says Rajesh Vaswani, executive director, Venus Infrastructure & Developers Ltd.
Such has been the constant demand from F&B retailers that rentals in main streets of Ahmedabad like Satellite Road and Law Garden have witnessed a rise in rentals by 25 and 20 per cent, respectively. According to Shrenik Shah, CEO of Space Management, a ground floor in areas like CG Road, Law Garden and Satellite have risen to anywhere between Rs 100-120 per sq ft, while others like SG Highway, Drive-In and Kankaria are picking up at Rs 50-60 per sq ft.
What's more, it is one of the few segments willing to pay premium based on location. "Restaurants are willing to pay premium for a nice location like a corner of the road. While Ahmedabad cannot be compared with Mumbai where liquor is an added advantage, the F&B segment has still grown continually. Moreover, players like us have an advantage wherein we offer outdoor ice-cream parlour along with air-conditioned restaurants," says Pradeep Chona, director of Havmor Foods Pvt. Ltd.
Seconding these views is Cushman and Wakefield, a real estate consulting firm which says, "Although rentals have remained stable in the last quarter, Satellite Road and Law Garden have witnessed an increase of 25 per cent and 20 per cent year–on-year primarily due to demand from food and beverage retailers. Lower rentals compared to C.G. Road have fuelled demand in locations such as Law Garden and S.G Highway."
Shah also hints at the business model that helps F&B segment keep buzzing. "Everything is sold in cash unlike other retail verticals which sell on credit. Moreover, they have been the primary drivers of ground floor and first floor spaces in recent times, the most lucrative part of any commercial property," points Shah.
As a forecast, Cushman and Wakefield believes major leasing activity to continue in these main streets. "A majority of the leasing activity is expected to be centred around the main streets due to the preference of retailers. Main street locations such as Satellite Road and C.G road, being the most prominent retail destination in Ahmedabad, have observed increased enquiries from retailers," the real estate consulting firm says.
However, industry experts are doubtful about the longevity of the trend. "If the rentals continue to rise on the back of the F&B segment, it may not be feasible for the lesser mortals. Growth in real estate, especially in terms of rentals and tariffs, is never sustainable for the economy," cautions Shah.
