What Will be The Story of High Street Rentals of Leading Indian Cities in 2023?

The Story of Indian High Street Rentals in 2023

To understand this we should know first as to why have high street rentals in India's leading cities increased by a whopping 50% in 2022-23?

According to an estimate by commercial real estate consultants Cushman & Wakefield, high-street rentals in the nation's top eight cities increased by up to 50 percent in 2022, while shopping malls witnessed a 10 percent rise in average annual rent.

In spite of this, businesses hurried to establish storefronts on both main streets and in shopping malls last year as offline retail sales increased.

In 2022, Bengaluru's rents increased the most due to high demand and limited supply of quality retail premises.

Brigade Road, Commercial Street, and Vittal Mallya Road in downtown Bengaluru, Indiranagar in the east, and Koramangala, HSR Layout, and Jayanagar in south Bengaluru have all witnessed substantial development.

During October-December 2022, the Khan Market in Delhi saw an increase in rents both quarterly and annually.

Bangalore witnessed the greatest increase due to a high demand for retail space but limited supply.

According to Anshul Jain, head of APAC tenant representation and managing director, India and Southeast Asia, for Cushman & Wakefield, the development of the high street rental sector would continue as a result of the increasing demand for retail space.

Recently, Samsung launched its biggest premium experience shop in North India at Connaught Place in New Delhi, while Japanese retailer Uniqlo also opened a store in the heart of the capital city.

During the December quarter, over 100,000 square feet of retail space was leased in Delhi, with the bulk of the activity occurring in prime locales like as Khan Market, Defence Colony, and Greater Kailash.

During the quarter, leasing on Delhi-main NCR's streets was dominated by the accessories and lifestyle category, as well as the wellness section. Zigly, a retailer of pet products and grooming services, built outlets in Punjabi Bagh and Green Park, while Tim Hortons, a Canadian coffee company, also expanded.

India's retail real estate has shown a consistent pattern of expansion, sustaining the rebound's momentum, which is projected to gain additional impetus.

In the approaching quarters, it is anticipated that mall and main street rents in Mumbai would continue to appreciate.

In the future quarters, mall rental prices are anticipated to increase, approaching pre-Covid levels, as a result of the low vacancy rates and restricted new supply across quality retail malls.

Core areas of the city such as Fort, Colaba, and Lower Parel are dominated by F&B brands such as Neuma, Gateway Taproom, and Toast Pasta Bar, while suburban areas such as Juhu, Bandra, Santacruz, and Powai are dominated by F&B and lifestyle brands such as Foo, Pop Tates, Third Wave Coffee, and Tasva, Fizzy Goblet, and W for Women.

During the Covid-led shutdown, less limitations were imposed on high streets than on malls, causing shops to choose open areas over malls, which were either closed or operated under stringent rules for many months.

After the initial wave of Covid-19, when lockdown limitations were lifted, the first retail centres to restart operations were prominent high streets.

As the epidemic progressively receded, more merchants indicated desire in establishing a presence on high streets, which had limited quality space available. Experts in retail real estate in India said that as a consequence, rentals on key high streets in major Indian real estate markets rose more rapidly than those of malls.