With Covid-19 wreaking havoc in the country, average monthly rentals across the key high street markets in top cities witnessed some corrections. As per recent data by ANAROCK Retail Research, the iconic retail hub in Delhi – Khan Market – saw average monthly rentals reduce by as much as 8 per cent to 17 per cent in Q1 2021 against Q1 2020.
Likewise, high street markets of Kala Ghoda, Bandra Linking Road and Fort in Mumbai (one of the worst-affected city) also saw high street retail rentals decline anywhere between 5 per cent to 10 per cent during the same period.
"Retail sector has been one of the worst affected due to the pandemic since early 2020. With almost zero sales amidst lockdown and thereafter as well for few months, we saw retailers closing their stores or even curtailing their future expansion plans," said Pankaj Renjhen, COO & Joint MD - ANAROCK Retail.
As a result, the average monthly rentals across the major high street retail markets mostly saw corrections across cities. "However, there were also few markets that saw an upward trend. For instance, Hyderabad localities such as Gachibowli, Banjara Hills, Jubilee Hills saw average retail rentals increase in Q1 2021 against Q1 2020," Renjhen added.
In an overall trend, many of the prominent high streets in the country saw reduced monthly rentals over the last year.
Renjhan said that if we were to consider trends of the previous two quarters, the retail segment seemed to be on the verge of recovery and was gradually inching towards the pre-pandemic-level business. However, the second wave has once again crimped this growth.
Almost zero sales seriously impacted the retail sector during the first lockdown, according to ANAROCK. However, soon after that, many retailers closed down their stores permanently or a the very least, curtailed their expansion plans.
Dismal scenario across cities
Given this sombre scenario, the average monthly rentals across major high street retail markets began correcting by anywhere between 2 per cent and 30 per cent. However, some markets saw an upward trend in the same period.
The country’s most expensive retail hub – Khan Market in New Delhi - saw a drop of between 8-17 per cent on average monthly rentals in Q1 2021, as against Q1 2020. The avg. monthly rentals hovered b/w ₹ 1,000-1,100 per sq. ft. as on Q1 2021-end. Likewise, in GK-1 M Block, rentals reduced between 13-14 per cent and are presently b/w ₹ 300-350 per sq. ft.
Brigade Road in Bengaluru saw a drop in rentals between 8-17 per cent in Q1 2021 as against Q1 2020 with the current average monthly rentals between ₹250-275 per sq. ft. At Indiranagar, the rentals range between ₹225-250 per sq. ft.
Another highly impacted city was Pune, where average high street monthly rentals dropped anywhere between 8-20 per cent in Q1 2021 compared to Q1 2020. While M G Road saw rentals maintain the status quo of ₹250-275 per sq. ft., the landlords on J M Road also hold the rents at ₹275-300 per sq. ft. despite vacancy.
Kolkata also saw a decline in its high street rental rates, Gariyhaat Rash Bihari Avenue being the worst affected in the city, with rental rates dropping to ₹160- 220 per sq. ft. in Q1 2021 from ₹250-260 per sq. ft. in Q1 2020, the report said.
Mumbai saw about 5-10 per cent decline in rentals rates in key markets as of Q1 2021 against the previous year. The current average monthly rentals at both Kala Ghoda and Fort area are around ₹450-500 per sq. ft. each, while at Bandra Linking Road it stands at approx. ₹750-900 per sq. ft.
In contrast to all major cities, Hyderabad saw an increase in average high street rental rates in Gachibowli, Banjara Hills and Jubilee Hills as much as 7-15 per cent during this period. The avg. monthly retail rentals in Gachibowli are now at ₹115- 125 per sq. ft. Last year, they were ₹100- 120 per sq. ft. In Banjara Hills 12, the avg. monthly rentals increased from ₹120-130 per sq. ft. in Q1 2020 to anywhere between ₹135-140 per sq. ft