High street rentals in the key cities of the country have risen up to 58% in 2012 on a yearly basis, said a new study by international property consultant Cushman & Wakefield.
Vittal Mallya Road in Bangalore, Colaba Causeway in Mumbai, Camac Street in Kolkata have seen a rise of 58%, 56% and 33%, respectively, the study said.
Khan market in Delhi remained the most expensive retail location with rental values at Rs 1,250 per sq ft and registered a rise of about 4% over the last year. While most high streets experienced rise in rentals or remained stable, select high streets of Bengaluru (Brigade Road, Sampige Road, Kamanahalli Main Road and Commercial Street) and Chennai (Usman Road – North and Anna Nagar 2nd Avenue) witnessed year on year drop in rental levels, the report said.
In the mall segment, Ahmedabad witnessed the highest average mall rental increase of 23% over last year followed by Kolkata at 12%. Pune, however, saw a decline of 4% in mall space rentals owing to a slowdown in retailer activity and an oversupply condition for mall space in certain micro markets.
According to the report, over 58% (4.8 million square feet) of the total expected supply has been deferred. The highest deferment of supply was recorded in Mumbai and Hyderabad where none of the planned supply entered the market, followed by Chennai (87%) and NCR (75%). Total of 10 new malls started operations in 2012 with Bengaluru witnessing the highest mall supply of 1.86 million sq ft this year.
Average mall vacancy across cities stood at 20%, a decline of 1% over last year, partly aided by the large deferment of malls. Ahmedabad witnessed the sharpest drop of 7% in mall vacancy levels even while it recorded the highest vacancy levels in 2012. Hyderabad, Mumbai and NCR witnessed marginal improvements of 1-2% each on account of increased leasing activities. Bengaluru and Chennai witnessed approximately 2% rise in mall vacancies owing to influx of new mall space and a general non availability of quality mall space in these cities.
