2.18 mn sq ft of retail space being built in B'lore

Retail real estate market continues to be on an upswing in Bangalore with increasing demand for quality space owing to sudden rush of global brands.

In all about 2.18 million square feet of retail space is presently under construction in the suburbs and is expected to be ready by the year 2008, said Trammell Crow Meghraj's quarterly retail report.

Organised retail space offtake in the city in the first quarter (Q1) of 2006 has been to the tune of 1.55 million square feet and another one million square feet of space is under construction in non-prime central business district (CBD).

With high space off-take in the city, overall vacancy rates continue to be low. There has been steady offtake of space by retailers ensuring persistent demand for retail space across the city.

Capital and rental values in Q1 for retail space continues to be stable. Average rental values for retail space in malls in the prime CBD are quoted at $252 to $449 per square meters per annum, while rentals in non-prime CBD locations are quoted at $157 to $196 per square meters per annum.

Rentals for retail space in malls presently under construction in suburbs are quoted at $154 to $182 per square meters per annum. Average rental values for retail space at high street locations in the prime CBD range from $350-$500 per square meters per annum.

Key major retail transactions in Q1 were Pantaloons taking up 1.2 lakh square feet and 1 lakh square feet at Whitefield and 35,000 square feet at BMTC Shantinagar. Lifestyle took 1.7 lakh square feet on Inner Ring Road, Koramanagala and 1.5 lakh square feet on Banerghatta road.

Steady demand from retailers is being witnessed in suburban and peripheral locations. The main focus are upcoming retail developments in the city with a number of mall projects being planned by developers.

Some of the upcoming mall developments are presently under construction in suburban locations like Outer Ring Road, Marathalli Junction, Mysore Road and Old Madras Road.

However, Rajajinagar and Malleswaram in the non-prime CBD locations are slated to emerge as retail destinations in the future with developments such as Brigade Mall and Mantri Mall currently under construction in these localities.