India Retail
www.cbre.co.in
India Overview
The second half of 2011 witnessed increased
transaction activity and a surge in retailer expansion
across the country. Leading brands and retailers
pursued their expansion plans aggressively, increasing
their presence in the tier I as well as tier II and III cities of
the country. Market expansion and opportunities in the
organised retail industry led to a surge in supply of mall
developments as well as retailer enquiries.
A positive economic outlook in the first few months of
2011, besides a strong consumption expenditure
outlook and rising sales led to a number of retail malls
getting completed in the last six months of the year.
Almost 9.6 million sq ft of organised retail mall supply
was introduced into the market in the second half of
2011, compared to almost 6 million sq ft in the first
half. This was led by Mumbai, Pune, Bangalore and
Chennai, comprising of more than 90% of the entire
organised mall supply during the review period. Large
completions included Pheonix Market City, K Raheja
Infinity Mall and Neptune Magnet Mall in Mumbai,
MGF Metropolis in Gurgaon, Phoenix Market City and
Ascendas Park Square in Bangalore. Most of these
large developments were dominated by multiple
anchor tenants in the form of hyper markets like Big
Bazaar, Pantaloon, Shoppers Stop, Reliance Mart and
Lifestyle leasing large retail zones at attractive rates.
Lifestyle brand Zara opened its outlet in four of these
newly complete properties, while Steuben opened its
first outlet in Delhi. Couple of other vanilla retailers
also expanded operations in these newly operational
as well as old existing properties. The supply
introduced into the market was a consequence of the
positive sentiments amongst retailers on spatial
expansion and enhancing their footprints across the
country, even as transaction frameworks like minimum
guarantee coupled with revenue share model became
July - December 2011
more acceptable in the industry. Developers have also
hedged their risks by developing retail as a part of
integrated mixed use developments. The Phoenix
Group introduced its Market City malls in Mumbai,
Pune and Bangalore in the last few months, which are
retail mixed use developments, comprising of
entertainment, hospitality and commercial office space
as other use types.
In all the seven cities presented in this review, the retail
real estate market appears to be promising with an
increase in retailer enquiries. Retail mall rentals
witnessed growth in prime city micro markets, while
witnessing stability in suburban (supply laden)
destinations in key cities like NCR, Mumbai and
Bangalore. There was a market correction in select
mall developments in few micro markets of Pune,
Chennai and Hyderabad. This was a consequence of
supply pressures, besides poor design and tenant mix
in few properties. Moving ahead, transaction activity
and size are expected to increase on the back of
increase in consumer spending and expanding midincome purchasing power. However, despite an
anticipated increment in demand, a downside remains
in the form of huge retail mall supply pipeline in most
leading cities. This might lead to a demand – supply
mismatch which might eventually lead to long term
pressures on retail rents in select micro markets.
As urbanisation grows and cities continue to embrace
organised retail, retailers have been expanding
operations across the country. Leading brands have
been opting for organised mall space, as well as
standalone outlets on high street destinations. Retailer
enquiries for prime high street retail spaces remained
high during the review period and is expected to
increase in the coming few months. The sustained
increase in demand led to an escalation in rental
values across most leading high street destinations.
© 2011, CBRE, Inc.
India Retail
The retail industry reacted positively to the cabinet
approval to foreign investment in multi brand retail in
the country. While implementation of the proposal was
delayed due to political pressures, it is expected that the
coming few months might witness the proposal being
introduced in a slow and phased manner. The move is
likely to be implemented in leading retail hubs like
Delhi and Mumbai and eventually move to other tier II
and III cities in the country. The proposal seeks to
amend supply side constraints in the retail industry
while providing an immense opportunity to developers
looking at reducing vacancy pressures in their existing
properties.
NCR
Market Summary
Despite volatile global cues, the Indian retail market
displayed resilience and witnessed healthy growth
levels throughout 2011. The Delhi-NCR retail market
displayed a similar growth pattern, with many new
international brands setting up base in the region.
Existing brands continued to explore suitable
opportunities for expansion, though keeping a firm eye
on aspects such as sustainability and per store
profitability.
Various international brands expanded their presence
in the city in the second half of 2011. These included
Steve Madden at Ambience Mall in Gurgaon, Bebe at
the Pacific Mall in Rajouri Garden and WH Smith at DLF
Promenade in Vasant Kunj. Shoppers Stop expanded
operations in North West Delhi, opening almost
48,000 sq ft of retail space housing brands such as
Benetton, Tommy Hilfiger amongst others. Prominent
brands that further strengthened their presence in the
local market included Clarks (DLF Saket), KFC (Pacific
Mall Rajouri Garden), Costa Coffee (DLF Promenade
and Basant Lok Market), Puma (Mukherjee Nagar),
Canon Image Square (Select City Walk), amongst
others.
July-December 2011
All prominent high streets across the city continued to
remain high on the radar of retailers thereby leading to
high levels of leasing enquiries from international as
well as domestic brands. Setting up base on high
streets has been a part of the strategy of retailers to
cater to a wider consumer base as well as design
marquee store formats. Some prominent flagship
stores that opened during this review period include
the Bestseller store in South Extension, Tanishq store on
Bungalow Road, Kamla Nagar, HCL Flagship Store in
Nehru Place and the Helios store in Connaught Place.
Connaught Place continued to benefit from its
centralised location and existing tenant mix, thereby
witnessing a sustained retailer interest. Body Shop
inaugurated its 1,000 sq ft store; while Tommy Hilfiger
opened its hundredth store in India spread over 2,000
sq ft in F block in November.
In the luxury retail market, renowned American home
and lifestyle brand Steuben launched operations in
India with its first store at DLF Emporio in Vasant Kunj.
Another notable announcement was the planned entry
of the french women's footwear brand Christian
Louboutin in India with a store being considered at the
DLF Emporio. Diesel Black Gold, the luxury range of
Diesel, is also expected to open its exclusive India
boutique at the luxury mall destination. DLF Emporio
also witnessed the well-known home and lifestyle
domestic format OMA launching its fine dine concept
called AUMA, adding a new product category to its
offering.
On the supply side, the second half witnessed the
completion of MGF Metropolis in Gurgaon. The mall is
spread over an area of 0.65 million sq ft and has
Lifestyle and Spar as the key anchor tenants.
Rental Trends
Rental values remained stable in most of the micro
markets in the Delhi-NCR market due to limited supply
and steady demand. However, the mall cluster in
Vasant Kunj witnessed a rental appreciation in the
range of 10-11% as compared to the first half of 2011.
These two premium retail destinations are considered
a priority market for expansion by various global and
Indian retailers.
In the suburbs, Noida remained stable due to subdued
demand, while Gurgaon witnessed a rental
Page 2
© 2011, CBRE, Inc.
Major Leasing Transactions
Tenant
Mall Clusters
350
300
Rentals ( INR/sq ft/month)
250
200
India Retail
appreciation of around 14-15%. Gurgaon is the hub of
office stock, besides a key residential destination for
professionals and expatriates, hence, a focal
destination for leading retail brands. High street
rentals witnessed steady growth in key markets such as
Connaught Place and South Extension in the range of 4
-8% respectively, owing to sustained demand for such
traditional retail destinations.
150
100
50
Building
Approx. size
(in sq ft)
Location
Diesel Black Gold
First Floor, DLF Emporio
Vasant Kunj, New Delhi
1,920
Steve Madden
Ground Floor, Ambience Mall
Gurgaon
2,000
Dominos Pizza
Basant Lok Shopping Complex
Basant Lok, New Delhi
2,000
Helios
E Block, Inner Circle
Connaught Place, New Delhi
2,600
Bebe
Ground Floor, DLF Promenade
Vasant Kunj, New Delhi
3,400
0
H2 2009
H1 2010
Saket District Centre
HIGH STREET RENTALS
High Street
Average rental
(Jul – Dec ‘11)
INR/sq ft/month
Average rental
(Jan – June ‘11)
INR/sq ft/month
Khan Market
1100-1200
1100 - 1200
South Extension
700-800
600 - 750
Basant Lok
300-350
250 - 350
Connaught Place
600-700
550 - 700
High Streets
1,400
Rentals ( INR/sq ft/month)
1,200
1,000
800
600
400
200
0
H2 2009
Khan Market
H1 2010
H2 2010
South Extension
H1 2011
Basant Lok
H2 2011
H2 2010
Vasant Kunj
H1 2011
Noida
H2 2011
Gurgaon
Outlook
The Government has been taking positive steps
towards permitting foreign direct investment in multi
brand, as well as single brand retail. While the
implementation of the move might have been
delayed due to political pressures, this is likely to
influence developers to adopt a 'staggered'
approach towards leasing new space in their
premium properties. Developers might hold onto
vacant space in their developments for premium
international retail brands, which might lead to
limited churn in prime retail space in the next few
months.
As micro markets such as Gurgaon and Noida
witness an increase in population levels,
international hypermarket retailers are evaluating
the potential of these locations for setting up base. A
host of developers are finalising projects in
anticipation of demand from such retail
developments, which is likely to lead to a rental rally
in the near future.
Connaught Place
Mumbai
ORGANISED RETAIL RENTALS
Average rental
(Jul – Dec ‘11)
INR/sq ft/month
Average rental
(Jan – June ‘11)
INR/sq ft/month
Saket District Centre
275-375
275-375
Vasant Kunj
200-300
200-250
Noida
150-250
150 - 250
Gurgaon
150-250
125-225
Market Summary
Mumbai witnessed heightened activity in its retail
market in the second half of 2011, with an increase in
absorption of large format as well as vanilla retail
spaces in high street locations and newly launched
malls. While demand for prime retail space continued
Page 3
© 2011, CBRE, Inc.
July-December 2011
Mall Clusters
Around 4 million sq ft of mall supply (mainly
concentrated in the Central/Eastern suburbs) was
released in Mumbai in the second half of 2011. The
second half of 2011 witnessed malls such as Market
City in Kurla (1.6 million sq ft), R - City Phase II in
Ghatkopar (W) (0.5 million sq ft), Magnet Mall in
Bhandup (W) (1 million sq ft) and Infinity Mall at Malad
(W) (1 million sq ft) becoming operational.
During the review period, high street locations
witnessed an increasing demand from retailers, with
the likes of Celio, Presto and Mango (relocation)
opening stores in Linking Road. Other high street
locations such as Juhu Tara also witnessed space take
up from retailers such as Edible Arrangements, Flight
Shop and Yogurberry. Various brands opened their first
stores in the city, like OVS, Bebe, Queue Up, Alcott and
Boggi Milano at Infiniti Mall in Malad and Timberland,
Paul & Shark and L'Occitane at High Street Phoenix.
Amongst the other notable retail transactions in the city
was the first stand alone hypermarket store by Reliance
Retail, measuring approximately 80,000 sq ft and
spread over four levels on S.V Road, Santa Cruz (W). In
the cash and carry segment, Metro Cash And Carry
India opened its second outlet, spread over 60,000 sq
ft, in Borivali (E) on the Western Express Highway.
Banks were also key occupiers of retail property in
major locations, with retail banking branches at a
spread of 2,500-5,000 sq ft being opened in various
locations. Yes Bank opened its branch on S.V Road in
Khar (W) and IndusInd Bank inaugurated branches at
Prabhadevi, Linking Road and Khar.
Rental Trends
Steady demand levels and limited supply led to a
marginal rental increment of almost 2-3% in leading
high street locations in the city. Retailer enquiries
increased in emerging markets of Andheri and Borivali
on S.V Road stretch which led to an upward movement
in rental values in these locations.
In the organized retail mall segment, rental values in
Central Mumbai and Western suburbs witnessed an
increment of almost 15-20% due to limited supply and
churn of Grade A space in these markets. However,
rental values in the Eastern Suburbs appreciated
marginally, due to large supply addition and a
significant pipeline of vacant space in new
developments.
Major Leasing Transactions
Building
Location
Approx. size
(in sq ft)
Bebe
Infiniti Mall
Link Road, Malad (W)
3,000
Smoke House Deli
High Street Phoenix
Lower Parel
3,500
The Irish House
High Street Phoenix
Lower Parel
3,500
OVS
Infiniti Mall
Link Road, Malad (W)
6,000
Bharti Walmart
Magnet Mall
LBS Marg, Bhandup (W)
32,000
Tenant
HIGH STREET RENTALS
High Street
Average Rental
(Jul – Dec ‘11)
INR/sq ft/month
Average Rental
(Jan – June ‘11)
INR/sq ft/month
Linking Road
650-900
600-900
Colaba Causeway
470-500
450-500
Kemps Corner
450-475
425-450
High Streets
900
800
700
Rentals (INR/ sq ft/ month)
India Retail
to remain strong in traditional markets such as Linking
Road, Colaba CauseWay and Breach Candy, new
locations such as Borivali, S.V Road (stretch from Santa
Cruz West to Andheri West) as well as Chembur gained
prominence amongst retailers like Reliance, KFC, Louis
Philippe and Titan. The attractiveness of these new
markets is driven by the lack of availability of quality
organized retail mall space in proximity to these
locations, which boast of a large catchment having a
high propensity to spend.
600
500
400
300
200
100
0
July-December 2011
H2 2009
Linking Road
H1 2010
H2 2010
Colaba Causeway
H1 2011
H2 2011
Kemps Corner
Page 4
© 2011, CBRE, Inc.
ORGANISED RETAIL RENTALS
Average rental
(Jul – Dec ‘11)I
NR/sq ft/month
Average rental
(Jan– June ‘11)
INR/sq ft/month
Central Mumbai
400-600
375-500
Western Suburbs
200-350
185-275
Eastern Suburbs
170-250
160-250
Mall Clusters
600
Established high street locations continued to witness
mid size transactions during the quarter. International
apparel brand Avirati forayed into the city by leasing
3,800 sq ft of retail space at Indira Nagar. In the
emerging market of Kamanahalli, McDonald’s and
Tanishq leased 2,200 sq ft and 5,800 sq ft of retail
space respectively.
Rentals (INR/ sq ft/ month)
500
400
300
200
100
0
H2 2009
H1 2010
Central Mumbai
H2 2010
H1 2011
H2 2011
Western Suburbs(Andheri/ Goregaon / Malad)
Eastern Suburbs (Kurla/Ghatkopar/Bhandup)
Outlook
Prime high street locations and Grade A mall
developments will continue to witness an increase in
interest from retailers planning an expansion in the
city. New developments such as Phase-II of R-City at
Ghatkopar, Magnet Mall at Bhandup, Infiniti-II at
Malad and Market City at Kurla, all in the Eastern
Suburbs of Mumbai have commenced operations,
and are expected to witness leasing of large vacant
space in the next 6-8 months. Vivacity with over 1
million sq ft of retail space in Thane is expected to be
operational in the next few months and is expected
to contribute to supply pressures in the city. Rental
values are expected to stabilize or increase
marginally, keeping in mind the demand trends of
domestic as well as international brands, besides the
extent of pipeline in various micro markets.
Bangalore
Market Summary
Bangalore witnessed completion of almost 1.6 million
sq ft of organised mall space during the last six months.
Two major malls were completed in the micro market
of Whitefield. The Market City mall (2.5 million sq ft of
mixed used development) developed by the Phoenix
Group has major retailers like Zara, Nautica, Sbarro,
Aldo, Hush Puppies, Timberland and Big Bazaar. The
ITPL campus at Whitefield developed by Ascendas
launched the Park Square Mall (0.45 million sq ft)
within its campus with a built-in access for its
employees. Major brands like Habanero, Reliance
Trends, The Hive, Centrum, Urbana, Soles, Via, Indigo
Nation and Space along with Q Cinemas (multiplex)
and Amoeba (gaming) have leased space in this mall.
Another notable mall development was the Signature
Mall (0.2 million sq ft) by the Gopalan Enterprises
located at Old Madras Road which is one of the major
retail developments on this stretch. Retailers like
Shoppers Stop, Adidas, Derby, Puma, Nike, Swarovski,
Titan, Lifestyle, Odyssey, Blackberry's, Pantaloon,
Whizz and W are some of the key tenants in this mall.
Bangalore also witnessed the opening of hyper
markets like MORE Mega store (Aditya Birla Retail
Limited), Big Bazaar (Upscale format from Future
Group) and Easy Day (Bharti - Walmart). International
brands like Avirati, Porsche, Hush Puppies and
Habanero also established operations in the city
during this period.
Preleasing activities was evident in the Orion Mall at
Page 5
© 2011, CBRE, Inc.
July-December 2011
The retail market in Bangalore was largely buoyant in
H2 2011, due to various elements ranging from steady
India Retail
Mall Clusters
stream of new mall/retail developments emerging in
the market space and also active leasing activities by
both vanilla brands and anchor formats in established
and emerging high streets. Rental values across all key
markets witnessed an increase, largely driven by the
demand-supply dynamics of the retail market in the
city.
Rajajinagar and Vega City at Bannerghatta Road
which would be operational in 2012. The 1MG Road
mall located in the CBD has also witnessed substantial
absorption prior to its launch which reflects optimum
demand for organised retail space across Bangalore.
High Streets
350
Rental Trends
250
200
150
100
50
The micro markets of Indiranagar and Brigade Road
recorded a rental increase of 8-9%, although anchor
retailers continued to lease at discounted pricing, with
a combination of minimum guarantee or revenue
share models in place. Incremental demand for high
street retail space in the emerging locations of BEL
Road and Kammanahalli led to an increase of 12-16%
in rental values during the review period.
Operational malls located in the CBD continued to
witness an increment in rental values, due to healthy
absorption and enhancing footfalls, even as rental
stability was witnessed in under construction
properties. South Bangalore witnessed a steep
increment in rental values due to encouraging preleasing in the Vega City mall, which is currently under
construction at Bannerghatta Road. There was a
marginal decrease in rental values at Whitefield due to
supply pressures and increased availability of mall
space in this micro-market. The Outer Ring Road
witnessed a rental appreciation of 12-15% during this
period, largely driven by an increase in demand levels
in this micro market.
Major Leasing Transactions
0
H2 2009
H1 2010
H2 2010
H1 2011
H2 2011
Brigade Road
Jayanagar 11th Main 4th Block
Commercial Street
100 Feet Road, Indiranagar
Kammanahalli /HRBR Layout
New BEL Road
ORGANISED RETAIL RENTALS
Mall Clusters
Average Rental Values
(July – Dec 11)
INR/sq ft/month
Average Rental Values
(Jan – June 11)
INR/sq ft/month
CBD/Off CBD
140-180
120-180
South Bangalore
(Koramangala/Jayanagar)
140-180
100-110
East Bangalore
(Airport Road, Ulsoor, Whitefield)
75-85
80-90
ORR
70-80
60-70
West Bangalore
100-120
100-120
Mall Clusters
200
Rentals (INR/ sq ft/ month)
India Retail
Rents (INR/sq ft/month)
300
150
100
50
0
Tenant
Building
Location
Approx. size
(in sq ft)
InMark Retail
Stand Alone
Guard CR Road (CBD)
15,000
Coupon Mall
Stand Alone
Bannerghatta Road (South)
22,000
Reliance Digital
Brigade Solitaire
Residency Road (CBD)
22,000
HIGH STREET RENTALS
July-December 2011
High Street
Average Rental Values
(July – Dec 11)
INR/sq ft/month
Average Rental Values
(Jan – June 11)
INR/sq ft/month
Commercial Street
230-250
225-275
Brigade Road
275-325
250-300
Jayanagar 11th Main 4th Block
150-180
150-180
100 Feet Road, Indiranagar
130-160
120-140
New BEL Road
100-120
90-100
Kammanahalli /HRBR Layout
90-100
80-90
H2 2009
CBD /Off CBD
H1 2010
H2 2010
H1 2011
H2 2011
South Bangalore (Koramangala, Jayanagar)
East Bangalore (Airport Road, Ulsoor,Whitefield)
ORR
Outlook
Bangalore has been an attractive market for
expansion of leading brands and large scale hyper
markets, and is likely to remain the same in the
coming few months. Prominent high streets will
continue to attract higher rentals due to an
expanding retailer base and sustained footfalls.
Bangalore is also witnessing growth in the emerging
high streets primarily in the North and East regions
of the city. The completion of retail developments like
the Orion Mall by Brigade Group at Rajajinagar,
1MG Road by GCorp and Starcentres at MG Road
Page 6
© 2011, CBRE, Inc.
Chennai
Market Summary
Construction activity in the retail segment picked up
pace in the second half of 2011 due to increase in
demand from retailers both in CBD and Off CBD
locations. Majority of the developers and large scale
land owners are coming up with new constructions with
larger floor plates while few land owners are willing to
go ahead with BTS (Built-to-suit) options in order to
cater to enhanced demand levels from retailers.
During the last 6 months, most of the construction
activity was limited to high street locations such as
Nelson Manickam Road, Poonamallee High Road,
Adyar, TTK Road, North Usman Road and Velacherry.
Approximately 300,000 sq ft of retail space was
released during the last six months in this micro
market.
being the anchor tenant occupying almost 45,000 sq
ft. Food courts and other vanilla brands such as
Helvetica, Time Factory, Denizen and Cafe Coffee Day
have also occupied retail space in the mall.
Chennai retail market is expected to witness the
completion of almost 2.6 million sq ft of mall space by
the end of second half of 2012. This supply influx
would be led by properties like Grand Mall (200,000
sq ft by PS Srijan Group on Velacherry Main Road);
Forum Mall (600,000 sq ft by Prestige Group at
Vadapalani); Junction Mall (800,000 sq ft by MARG
Group at Karappakkam, OMR) and Market City (1
million sq ft by Phoenix Mills in Velacherry).
Rental Trends
Rental values on high street locations of
Nungambakkam High Road, T Nagar and Anna
Nagar remained stable, while those in Adyar and
Velacherry depreciated by almost 20% and 11%
respectively. On the other hand, Alwarpet observed a
rental increment of 12-13% during the review period,
largely attributed to an increase in demand for large
retail spaces, ready fit out options and built to suit
proposals in upcoming projects.
.
Rental values witnessed pressures in retail mall
properties, with a decline of almost 30% in Spencer
Plaza (Anna Salai) and around 5-10% in Chennai Citi
Center, Ampa Skywalk Mall and Express Avenue. A key
reason for drop in mall rentals has been reducing sales
and declining footfalls, largely attributed to an
unfavorable tenant mix and poor infrastructure
facilities in these malls.
In terms of organised retail, Coromandal Plaza
(spread over an area of close to 400,000 sq ft in OMR,
Navallur) commenced operations in July 2011, with
AGS Cinemas being the key anchor tenant besides
food courts and other vanilla retailers. Another mall
which became partially operational during this review Major Leasing Transactions
Tenant
Building
period is Spectrum Mall at Perambur with leasable
area of around 300,000 sq ft. Big Bazaar is a key
Titan
Standalone
tenant in this mall, having occupied around 60,000 sq
Planet Fashions
Standalone
ft of retail space .
LG Showroom
Standalone
Location
Approx. size
(in sq ft)
Shanthi Colony
2,500
Kodambakkam High Road
2,500
Nungumbakkam High Road
6,000
Louis Phillippe
Standalone
Anna Nagar, 2 Avenue
10,000
@homes
Standalone
Gandhi Nagar 1 Main Road, Adyar
16,000
Cinepolis
BTS
OMR, Thoraippakkam
18,000
Reliance Trends
Standalone
Adyar
26,500
LifeStyle
Standalone
Nelson Manickam Road
60,000
nd
st
Page 7
© 2011, CBRE, Inc.
July-December 2011
Additionally, Ramee Mall located at Teynampet, Anna
Salai with a leasable area of 200,000 sq ft is expected
to become operational by the end of December 2011.
This is a key retail property in the city integrated to a
Five Star Hotel (Hyatt Regency) with Shoppers Stop
India Retail
and Inorbit Mall by Raheja Group at Whitefield is
likely to add almost 1.3 million sq ft of mall space in
2012. Home grown Indian corporate houses have
lined up ambitious expansion plans for the next
financial year and are further being promoted by
various PE funds/companies that are increasingly
making their presence felt in the Indian
retail space.
Outlook
Average Rental Values
(Jan – June 11)
INR/sq ft/month
Nungambakkam High Road
130-170
140-160
T Nagar - Pondy Bazzar
140-160
140-160
Anna Nagar - 2nd Avenue
90-130
90-130
Velachery
70-90
80-100
Adyar
100-130
130-160
Alwarpet
120- 140
100-130
India Retail
High Street
Average Rental Values
(July – Dec 11)
INR/sq ft/month
The retail real estate market in Chennai is expected to
maintain an optimistic trend over the next few months.
This is largely due to increase in demand from retailers
and release of quality supply in the near term. Rental
values are expected to witness an increase in select
developments in the CBD / Off CBD micro markets, while
remaining stable elsewhere.
Hyderabad
High Streets
160
Market Summary
140
Rentals (INR/sq ft/ month)
120
100
80
60
40
20
0
H2 2009
H1 2010
H2 2010
Nungambakkam High Road
Velachery
H1 2011
T Nagar - Pondy Bazzar
H2 2011
Anna Nagar - 2nd Avenue
Adyar
Alwarpet
ORGANISED RETAIL RENTALS
Mall Clusters
Average Rental Values
(July – Dec 11)
INR/sq ft/month
Average Rental Values
(Jan – June 11)
INR/sq ft/month
Spencer Plaza (Anna Salai)
80-100
120-140
Chennai Citi Center (RK Salai)
140-160
140-180
Ampa Skywalk Mall
(Poonamalle High Road)
170-190
180-200
Express Avenue (Royapetah)
190-210
210-230
Mall Clusters
250
Rentals (INR/sq ft/ month)
200
Himayat Nagar witnessed low transaction activity due
to lack of ready supply. However, Max and Reliance
pre-committed approximately 30,000 sq ft of retail
space in the only under-construction stand alone
development in the micro market, which is expected to
be delivered by the end of 2012. Also, Tanishq
launched a 12,000 sq ft stand-alone store in this micro
market.
Around 150,000 sq ft of fresh supply was released in
the high street locations of Banjara Hills and Jubilee
Hills during the second half of 2011. However, no new
mall developments were completed during this review
period in Central Hyderabad and Western Suburbs.
Emerging micro markets of Habsiguda and AS Rao
Nagar witnessed interest from retailers already present
in other major micro markets in the city. United Colors
of Benetton (UCB) leased around 2,500 sq ft in an
independent building in this micro market during this
review period.
150
100
50
0
H2 2009
Location and tenant mix continued to attract retailers to
the high street locations of Banjara Hills and Jubilee
Hills in Hyderabad. Retailers such as Steve Madden
and Ebony Gautier launched their first stores at Jubilee
Hills Road No. 36 during this period. In addition,
brands like Canon Image Square, Laven Fashions,
Timberland, Nature's Basket and Quiznoz are
expected to open up their stores in this micro market by
the year end.
H1 2010
July-December 2011
Spencer Plaza (Anna Salai)
H2 2010
H1 2011
H2 2011
Chennai Citi Center (RK Salai)
Ampa Skywalk Mall (Poonamalle High Road)
Express Avenue (Royapetah)
Hitec City Main Road, now considered an emerging
high street location in the city, with a large
Page 8
© 2011, CBRE, Inc.
concentration of office stock, has been attracting
various F&B brands such as Mainland China, Venky's
and Papa John's Pizza. Most of these brands opened
their outlets on this stretch during this review period.
Manjeera Group introduced Manjeera Majestic, a
Grade A mixed use development with almost 60,000
sq ft of retail component, in Kukatpally. The retail space
in this development has witnessed substantial precommitment, with retailers like Spykar, Gitanjali Jewels
and Kalanjali committing spaces. Additionally, brands
like PUMA, Manyavar and Arvind Brands have opened
independent stores in Kukatpally during the second
half of 2011.
While rental values appreciated by almost 4-5% in the
high street location of Himayat Nagar, stability was
observed in most of the other high street locations like
Banjara Hills and Jubilee Hills. Rental values in Central
Hyderabad and Western Suburbs also remained stable
due to lack of fresh retail supply addition and very low
rate of churning.
India Retail
While there was negligible supply addition in the
organised retail segment in the past few months,
supply pipeline appears strong for the next 2-3 years.
Some of the major under construction malls include
Manjeera Trinity (440,000 sq ft by Manjeera Retail
Holdings Pvt Ltd) in Kukatpally, TNR Estate (385,000 sq
ft by TNR Constructions) in Kompally, Soma Mall
(700,000 sq ft by Soma Developers) in RTC Cross
Roads, Prestige Forum (850,000 sq ft by Prestige
Constructions) in Kukatpally and City Capital Mall
(700,000 sq ft by Skill Promoters) in Kondapur.
Rental Trends
Major Leasing Transactions
Tenant
Building
Location
Approx. size
(in sq ft)
Ebony Gautier
Stand Alone
Jubilee Hills(CBD)
15,000
Spencer’s
Stand Alone
Attapur (SBD)
20,000
Shopper’s Stop/ Hypercity
TNR Estate
Kompally(PBD)
100,000
HIGH STREET RENTALS
High Street
Average Rental Values
(July – Dec 11)
INR/sq ft/month
Average Rental Values
(Jan – June 11)
INR/sq ft/month
Himayat Nagar
110-120
105-115
Jubilee Hills Road No 36
130-140
130-140
Banjara Hills Road No 1
120-130
120-130
High Streets
160
140
Similarly, anchors like PVR, Star India Bazaar,
Westside, SPAR and Zara have also pre-committed
large spaces in other under-construction mall
developments. Such large scale pre-leasing by anchor
tenants reflects the attractive quotient of the city and a
positive outlook for the retail market.
Rentals (INR/ sq ft/ month)
120
Healthy pre-commitment has been witnessed in other
under-construction properties like Manjeera Trinity
(Cinepolis and SPAR have taken around 100,000 sq ft
of anchor spaces as multiplex and hypermarket
operators) and TNR Estate (Shopper's Stop has
committed around 100,000 sq ft). Additionally,
retailers such as Lifestyle, Star Bazaar and Cinepolis
have committed almost 200,000 sq ft of retail space in
Soma Mall in RTC Crossroads.
100
80
60
40
20
0
H2 2009
Himayat Nagar
H1 2010
H2 2010
Jubilee Hills Road No. 36
H1 2011
H2 2011
Banjara Hills Road No.1
ORGANISED RETAIL RENTALS
Average Rental Values
(July – Dec 11)
INR/sq ft/month
Average Rental Values
(Jan – June 11)
INR/sq ft/month
Central Hyderabad
(Banjara Hills, Panjagutta)
60-70
60-70
Western Suburbs
(Cyberabad, Kukatpally)
45-47
45-47
Mall Clusters
© 2011, CBRE, Inc.
July-December 2011
Page 9
Swarovski, Zara, Steve Madden, Timberland and
Clarks opening their first stores in the city. Other
retailers which opened stores included Diesel (Phoenix
Market City), Star Bazaar (opened up second
hypermarket in Phoneix Market City Mall) and
Hypercity (first hypermarket outlet in Pacific Mall).
Mall Custers
70
India Retail
Rentals (INR/ sq ft/ month)
60
50
40
30
20
10
0
H2 2009
H1 2010
Central Hyderabad
(Banjara Hills, Panjagutta)
H2 2010
H1 2011
H2 2011
Western Suburbs (Cyberabad, Kukatpally)
Outlook
High street locations of Banjara Hills and Jubilee
Hills would continue to attract retailer interest and
witness sustained demand. This is likely to enhance
transaction activity in such high street destinations.
Similarly, the organised retail segment is likely to
attract retailer interest in under-construction mall
developments. Retailers would be looking for
expanding their presence in these underconstruction properties, as most of them are nearing
completion.
Additionally, high street locations in Fatima Nagar,
Bund Garden Road and FC Road witnessed retailers
such as Reliance Digital, Sony, Canon, X Shoes and
Peter Pan taking up retail space during this review
period.
Rental Trends
Enhanced demand levels and lack of retail space led to
a rental increment of almost 9-10% in MG Road, the
most preferred high street location in the city. However,
rental values remained stable in other high street
destinations like JM Road, Aundh and Koregaon Park,
largely due to limited availability of good quality retail
space. On the other hand, despite healthy absorption,
the influx of a large supply pipeline led to a decline of
almost 5-6% in rental values across the Eastern
corridor of Nagar Road, Koregaon Park/Bund Garden
Road. This was evident in operational as well as
upcoming mall developments.
Pune
Major Leasing Transactions
Market Summary
The organised retail mall market witnessed an increase
in absorption of retail space due to scarcity of quality
retail supply in high street locations such as MG Road,
JM Road and Aundh Road, besides affordable rental
values. As a result, mall developments witnessed
absorption of almost 0.3 million sq ft of retail space
during this review period, which was an increase from
the previous review period.
Tenant
Building
Location
Approx. size
(in sq ft)
M&S
Amanora Mall
Hadapsar
7,000
Reliance Digital
Amanora Mall
Hadapsar
10,000
Ranka Jewellers
Stand Alone
Sinhgad Road
25,000
Shopper Stop
Pacific Mall
Swar Gate
40,000
Spar
Phoenix Mall
Viman Nagar
45,000
Hypercity
Pacific Mall
Swar Gate
50,000
HIGH STREET RENTALS
July-December 2011
Amongst the key developments that came on stream
included Amnora Mall by City Group in Hadaspar, with
a leasable area of around 1 million sq ft. Besides
Phoneix Market City (1 million sq ft) by Ruia Developer
in Viman Nagar and Pacific Mall (500,000 sq ft) by
Kumar Properties at Swar Gate. These malls witnessed
entry of large number of premium brands such as
High Street
Average Rental Values
(July – Dec 11)
INR/sq ft/month
Average Rental Values
(Jan – June 11)
INR/sq ft/month
MG Road
250-270
225-250
JM Road
250-275
250-275
Aundh
100-120
100-120
Koregaon Park
100-150
100-150
Page 10
© 2011, CBRE, Inc.
High Streets
Kolkata
250
Market Summary
200
Despite the current economic scenario, with most
brands adopting a cautious approach towards
expansion especially into tier 2 markets, the Kolkata
retail market displayed healthy growth levels. There
was no fresh supply that came on stream in the second
half of 2011. Most brands held onto their current
positions and new brands evaluated entry into the city
in primarily established mall developments such as
South City Mall and Forum/Forum Courtyard.
150
100
50
0
H2 2009
MG Road
H1 2010
H2 2010
JM Road
H1 2011
Aundh
H2 2011
Koregaon Park
India Retail
Rentals (INR/ sq ft/ month)
300
ORGANISED RETAIL RENTALS
Mall Clusters
Average Rental Values
(July – Dec 11)
INR/sq ft/month
Average Rental Values
(Jan – June 11)
INR/sq ft/month
MG Road
200-250
200-250
Nagar Road
100-125
100-140
Koregaon Park/
Bund Garden Road
100-125
100-140
Mall Clusters
250
Rentals (INR/ sq ft/ month)
200
150
100
50
0
H2 2009
MG Road
H1 2010
Nagar Road
H2 2010
H1 2011
H2 2011
Koregaon Park/ Bund Garden Road
Outlook
Vacancy levels were low in most leading mall
developments as there was no new addition to the
premium mall space in the city; while in prime city
locations the vacancy levels are expected to remain low
due to high demand from retail brands looking at
expanding operations. On the other hand, vacancy
levels in the suburban locations might witness supply
pressures, and as a result remain high, as large scale
supply gets added into the market in the next few
months by the completion of projects such as Forum
Howrah (200,000 sq ft by Forum Group) at
Bhowanipore and Acropolis Mall (300,000 sq ft is a
PPP between Kolkata Metropolitan Development
Authority (KMDA) and Merlin Projects Ltd) at RB
connector in South Kolkata.
Rental Trends
Rental values displayed an upward trend across most
micro markets, led by sustained demand and lack of
fresh supply. High streets such as Elgin Road, Camac
Street and Shakespeare Sarani witnessed a rental
appreciation of approximately 9-10% compared to the
previous review period. In terms of organised retail, the
Page 11
© 2011, CBRE, Inc.
July-December 2011
Limited supply of quality retail space, despite high
demand and footfalls, might lead to retailers
occupying spaces in new mall developments. This
might restrict rental escalation in high street
destinations in the city. On the other hand, a
substantial supply pipeline of almost 1.15 million sq
ft is likely to be released in the retail mall segment,
led by Koregaon Park Plaza, Koregaon (500,000 sq
ft) and Magarpatta Season's Mall, Magarpatta City
(650,000 sq ft). This might continue to restrict rental
values in mall developments across the city.
New international brands that expanded operations in
the city include US Polo Association and Chicco with
flagship stores at South City Mall. IT giant Apple
launched its 1,200 sq ft stand alone store on Park
Street. Leading fashion and lifestyle brands continued
to display an inclination towards prime mall space,
while those in the F&B category explored high street
options as well.
Salt Lake market observed a rental increment in the
range of 5-6%, while Jadavpur observed an increase
of almost 10-11%, owing to sustained demand for
space at the South City Mall.
ORGANISED RETAIL RENTALS
Average Rental Values
(July – Dec 11)
INR/sq ft/month
Average Rental Values
(Jan – June 11)
INR/sq ft/month
E M Bypass
130-150
130-150
Salt Lake
260-280
250-260
Jadavpur
250-275
225-250
Major Leasing Transactions
Approx. size
(in sq ft)
Tenant
Building
Location
US Polo Association
South City Mall
Jadavpur
1,000
Apple
High Street
Park Street
1,200
Forever New
South City Mall
Jadavpur
2,550
Reliance Jewels
High Street
Park Street
6,000
HIGH STREET RENTALS
Average Rental Values
(July – Dec 11)
INR/sq ft/month
Average Rental Values
(Jan – June 11)
INR/sq ft/month
Park Street
280-310
280-310
Elgin Road
210-230
190-210
Camac Street,
Shakespeare Sarani
210-230
190-210
High Street
Mall Clusters
300
250
Renta (INR/sq ft/month)
India Retail
Mall Clusters
200
150
100
50
0
H2 2009
E M Bypass
300
Rens (INR?sq ft/month)
250
200
150
100
50
0
H2 2009
Park Street
H1 2010
Elgin Road
H2 2010
H2 2010
Salt Lake
H1 2011
H2 2011
Jadavpur
Outlook
High Street Rentals
350
H1 2010
H1 2011
H2 2011
Camac Street, Shakespeare Sarani
More than 2 million sq ft of prime retail space is
expected to come on stream in Kolkata in the year
2012 as developments such as the Forum Howrah
Mall and Acropolis Mall near completion. With new
brand launches planned at these developments, the
local retail real estate market is expected to gain
impetus. New retail categories such as entry level
luxury are expected to make a debut at the Spencer's
Galleria, thereby leading to an enhanced retail
experience for consumers. With most of the new
developments commencing operations in 2012, an
increase in retailer enquiries and a possible
increment in rental values is expected in leading
micro markets of the city.
July-December 2011
Page 12
© 2011, CBRE, Inc.
List of Completed Retail Developments in H2 2011
Project
Developer
Location
1,600,000
Reliance, Zara, Lifestyle,
Pantaloon, PVR
1,000,000
Easy Day, McDonald's, Bata
Market City
Phoenix
Magnet Mall
Neptune Group
Infinity Mall -2
K-Raheja Constructions
Phoneix Market City
Ruia Developer (Market
city)
Market City
Phoenix Mills
MGF Metropolis
MGF Group
R-City, Phase-II
Runwal Builders
Amanora Mall
City Group
Hadapsar, Pune
500,000
Pacific Mall
Kumar Properties
Swar Gate,
Pune
500,000
Park Square
Ascendas
Whitefield Road,
Bangalore
Coromandal Plaza
Suryavardhan Estates
Spectrum Mall
Ganga Foundations
Lala Towers
Ramaniyam Dev.
Signature Mall
Gopalan
Ramee Mall
Ramee Hoteliers
ISANA Building
Kattimma - Group
Acme
Acme Group
Mahadevapura,
Bangalore
Gurgaon
Ghatkopar(W),
Mumbai
OMR, Chennai
Perambur,
Chennai
Nelson
Manickam
Road, Chennai
Old Madras
Road,
Bangalore
Teynampet,
Anna Salai,
Chennai
Poonamallee
High Road,
Chennai
Santa Cruz (W),
Mumbai
Key Tenants
1,000,000
1,000,000
900,000
650,000
500,000
Zara, Westside, Reliance, Future
Group
Star Bazaar, West side,
Pantaloons, Reliance, Landmark
Zara, Nautica, Sbarro, Aldo,
Hush Puppies, Timberland, Big
Bazaar
SPAR, Lifestyle
Westside, Shopper's Stop,
Madura Garments, Kidzania
Reliance Digital, Central, Big
Bazaar, Marks & Spencers
Hypercity, M &S
400,000
Habanero, Reliance Trends,
Amoeba, The Hive, Centrum,
Urbana, Soles, Via, Indigo
Nation, Space, Q Cinemas
AGS cinemas
300,000
Big Bazaar
287,072
Life Style
200,000
Shoppers Stop, Adidas, Derby,
Puma, Nike, Swarovski, Titan,
Lifestyle, Odyssey, Blackberry's,
Pantaloon, Whizz, W
200,000
Shoppers Stop
124,456
Mega Mart
80,000
Reliance Mart – Hypermarket
450,000
India Retail
Kurla (W),
Mumbai
Bhandup,
Mumbai
Malad (W),
Mumbai
Viman Nagar,
Pune
Area
(in sq ft)
© 2011, CBRE, Inc.
July-December 2011
Page 13
India Retail
INDIA OFFICES
India Retail
New Delhi
CBRE South Asia Pvt. Ltd.,
Ground Floor, PTI Building
4, Parliament Street,
New Delhi 110 001
T (91 11) 4249 0200 / 4239 0200
F (91 11) 2331 7670
Gurgaon
CBRE South Asia Pvt. Ltd.,
19th Floor, DLF Square, M Block,
Jacaranda Marg,
DLF City Phase II, Gurgaon 122002
T (91 124) 4659700
F (91 124) 4659800
Mumbai
CBRE South Asia Pvt. Ltd.,
#202/203, 2nd Floor,
Naman Centre, G-block,
Bandra-Kurla Complex,
Bandra (E),
Mumbai – 400 051
T (91 22) 40690100
F (91 22) 26527655
About CBRE Group, Inc.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company
headquartered in Los Angeles, is the world's largest commercial real estate
services firm (in terms of 2010 revenue). The Company has approximately 31,000
employees (excluding affiliates), and serves real estate owners, investors and
occupiers through more than 300 offices (excluding affiliates) worldwide. CBRE
offers strategic advice and execution for property sales and leasing; corporate
services; property, facilities and project management; mortgage banking;
appraisal and valuation; development services; investment management; and
research and consulting. Please visit our Web site at www.cbre.com.
CBRE South Asia Pvt. Ltd. was the first independent international Real Estate
consulting firm to set up office in the Indian sub continent. Over the last 16 years,
the Indian operations have grown to a network of offices in all the major
metropolitan cities. Today with over 2300 professionals, CBRE South Asia Pvt. Ltd.
is one of the leading Real Estate consultants in the Indian subcontinent. Please visit
our website at www.cbre.co.in.
Chennai
CBRE South Asia Pvt. Ltd.,
2C&D, Gee Gee Emerald
151, Village Road,Nungambakkam
Chennai 600 034
T (91 44) 2821 4599 / 4571 / 4619
F (91 44) 2821 4607
Bangalore
CBRE South Asia Pvt. Ltd.,
Hulkul Brigade Centre
Ground Floor, No. 82
Lavelle Road,
Bangalore 560 001
T (91 80) 40740000
F (91 80 ) 411 21239
Hyderabad
CBRE South Asia Pvt. Ltd.,
211, Maximus 2B,
Mindspace Cyberabad,
Survey No. : 64 (Part),
APIIC Software Layout,
Madhapur,
Hyderabad - 500 081
T (91 40) 40335000
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Pune
CBRE South Asia Pvt. Ltd.,
704/705/706, 7th Floor
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Pune - 411001
T (91 120) 26055437/367/397/40190100
F (91 120) 26055405
July-December 2011
We obtained the information above from sources we believe to be reliable. However, we have not
verified its accuracy and make no guarantee, warranty or representation about it. It is submitted
subject to the possibility of errors, omissions, change of price, rental or other conditions, prior sale,
lease or financing, or withdrawal without notice. We include projections, opinions, assumptions or
estimates for example only, and they may not represent current or future performance of the property.
You and your tax and legal advisors should conduct your own investigation of the property and
transaction.
Kolkata
CBRE South Asia Pvt. Ltd.,
Jindal Towers
2nd, Floor, Block B
21/1A/3 Darga Road
Kolkata - 700017
T (91 33) 40190200
F (91 33) 40190230
Page 14
© 2011, CBRE, Inc.