In its “Marketbeat Delhi-NCR Retail Q1, 2022” report, real estate consultant Cushman & Wakefield pointed out that footfall in malls in Delhi-NCR has reached 80-85% of pre-COVID levels and rentals have remained stable. during the first trimester. of this calendar year.
“High streets including Khan Market, Connaught Place and DLF Galleria saw rent growth of 3-5% quarter on quarter (quarterly) in the quarter, driven by strong demand and strong preference retailers for these areas,” the report said. mentioned.
Major streets like Greater Kailash and Karol Bagh in Delhi also saw slight increases in rents on a quarterly basis.
The consultant expects greater appreciation in the main main streets of the city.
According to the data, rentals in Sector 18, Noida increased by 5.6% to an average of Rs 190 per square foot per month from January to March 2022 from the previous quarter.
Rentals at Connaught Place increased by 5% to Rs 1,050 per square foot, while Khan Market saw an appreciation of 3.7% to Rs 1,400 per square foot per month during the reporting period.
Greater Kailash-1 M block and Karol bagh saw a slight increase of 1.3% in rents to Rs 380 per square foot and Rs 390 per square foot, respectively.
The Galleria at Gurugram also saw its rents rise by 3.7% to Rs 700 per square foot per month. Rentals in Sector 29, Gurugram remained stable at Rs 180 per square foot.
Rentals at South Extension and Lajpat Nagar remained steady at Rs 700 per square foot and Rs 250 per square foot, respectively.
Rentals in Punjabi Bagh and Rajouri Garden were also stable at Rs 225 per square foot per month.
No increase has been seen in Kamla Nagar, which commands a monthly rent of Rs 380 per square foot.
Speaking of malls, Cushman & Wakefield said “Rents stabilized at the end of the March quarter as normal business activity resumed, with no further extension of the easing measures that were given to retailers earlier to make in the face of the pandemic”.
However, brief rental easings were granted to retailers in January as operations were impacted by the third wave of COVID.
“Transactions with staggered tenancies with 10-15% easing in the first year and mid-market rents in the second year are increasingly becoming the norm in the city,” the report said.
The majority of new leasing transactions are structured with payment terms that allow retailers to benefit from certain waivers in the first year of operation.
The consultant said Delhi-NCR retail leasing was led by food and beverage, fashion and apparel segments from January to March 2022.
“Retailer turnover drove the majority of rental activity in Delhi-NCR during the first quarter.
New leases and store openings at city malls were recorded at 0.25 million square feet in the first quarter, highlighted by store moves and churn activity,” the report said.
High streets recorded new leases and store openings of almost 0.04 million square feet with prominent markets including Khan Market, Kamla Nagar, Greater Kailash, Karol Bagh, pulling witnesses.
Key high streets like Khan Market and Connaught Place continued to have limited space available amid huge retailer demand for these locations across multiple segments.
Food and beverages was a significant driver of retail space demand in the first quarter with new store openings by Gur Chini, Sticky Rice, Moti Mahal, Spaghetti Kitchen, among others.
“International QSR (quick service restaurant) chains planning to make a foray into the country are eyeing Delhi-NCR as a gateway city to mark their entry into India to tap into the growing preference for global cuisines” , says the report.
Retailers like Pantaloons, Tasva (by Aditya Birla), Steve Madden, Hugo Boss were active in the fashion and apparel segment during the first quarter.
“Major retailers with deep pockets have leveraged churn activity to expand their presence and open new outlets across the city,” the consultant said.
Pet care and grooming and electric vehicles are other segments with active space requirements for new stores as well as expansion, especially in submarkets such as South Delhi and Gurugram.
“Mall footfall has reached 80-85% of pre-COVID levels across all major malls in Delhi-NCR which bodes well for retailers,” he said.
The consultant pointed out that no new mall offerings have been added to the city’s mall inventory, which was recorded at 26.5 million square feet. The vacancy rate in shopping centers stood at 15.7% at the end of the first quarter.
About 0.84 million square feet of new retail space across Gurugram and Noida is expected to be completed by the end of 2022, Cushman & Wakefield said.