Delhi-NCR: Retail rents up 11-17% in Delhi’s high-end markets in July-September


New Delhi Retail Rentals Gradually Return to Pre-COVID Levels in Delhi-RCN Thanks to Business Recovery as Rents in Upscale Khan Market, South Extension and Connaught Place Increased from 11 to 17 % in July -September from the previous quarter, according to Cushman and Wakefield. “Rentals are gradually returning to pre-COVID levels as market activity strengthens,” global real estate consultant Cushman and Wakefield (C&W) said in its “Marketbeat-Delhi-NCR, Retail Q3 2021” report ( July-September).

The Delhi-NCR market saw an improvement in retail activity in the September quarter, the consultant said, adding that the first signs of recovery could be seen with a resumption of commercial leasing.

“With rentals returning to pre-COVID levels and accommodation under shrinking business terms, the only direction for retail in the coming months is on the rise,” said Vibhor Jain, chief executive of North, Cushman & Wakefield.

“The increase in vaccination and the low number of cases have certainly played an important role in the return to normalcy and greater consumer confidence,” the report says.

On the rent scenario, the consultant found that rentals at the main street Khan Market location increased 12.5% ​​to Rs 1,350 per square foot in the July-September quarter compared to the previous quarter.

In South Extension I & II, rent increased 16.7% quarter on quarter (QoQ) to Rs 700 per square foot during the third quarter of the current calendar year.

Connaught Place in central Delhi saw rentals increase 11.1% to Rs 1,000 per square foot. The annual increase in rentals at these three locations was the same in percentage terms.

The consultant pointed out that homeowners are gradually withdrawing the benefits they are giving retailers on rentals and other business terms due to the COVID pandemic.

“Landlords are demanding pre-COVID rents after supporting retailers with rent waivers or tiered rentals to deal with the pandemic period. With fears of a significant drop in Wave 3, landlords want to limit any other rent exemption, especially after income loss suffered by them during the last five quarters, ”C&W said.

The consultant said normal rental conditions are expected to resume as the pandemic abates and business prospects improve.

“Retailers with a revenue sharing agreement with owners have also started to share a higher proportion of revenue with increasing consumer spending. However, some new transactions are structured into staggered rentals on a case-by-case basis. negotiations between retailers and owners, ”the report says.

Main Street has registered new leases and store openings of nearly 0.13 million square feet in top markets including Khan Market, South Extension, Green Park, Defense Colony, among others.

“The occupancy rate on the main main streets is increasing rapidly with the resumption of commercial activity,” the report said.

Shopping centers also saw a significant improvement, with retailers opening new stores in some of the recently completed developments, coupled with a few store relocations, totaling 0.43 million square feet.

“There have been instances of store resizing with a few retailers requiring smaller stores. Fashion and apparel (especially leisure) and food and beverage (F&B) were the main retail categories. active in main streets and shopping centers, ”the report said.

Adidas, Nike, Skechers, Puma, Reebok have extended their commercial presence on several sites.

Khan Market, which saw an exodus of retailers in 2020, saw further space occupancy by F&B retailers in this quarter. Big Chill, Third Wave Cafe, Dighent Cafe were among the new cafes that took over. place on Khan Market, ”the report said. .

The consultant said the pull in retail leasing signals joy for the upcoming holiday season, especially as the industry is hit hardest by the pandemic.

“Leading malls have now started to record footfall reaching 70-75% of pre-COVID levels during weekends. Retail sales have also seen improvement and are expected to rise further as the city heats up. preparing for the festive months, ”the report says. noted.

Discretionary spending which took a hit last year is also on the rise, he noted.

North Delhi recorded the addition of a new 0.3 million square foot shopping center offering, bringing the overall shopping center inventory for Delhi-RCN to 27.1 million square feet at the end of the third quarter .

“The strong rental of several brands in the new development as well as the additional space occupied by retailers in existing malls has resulted in a 37 basis point reduction in the city’s vacancy rate, which is rising. now at 16.58% in the third quarter, ”the report said. noted.

US-based Cushman & Wakefield is one of the world’s largest real estate services companies with approximately 53,000 employees in 400 offices and 60 countries.

In 2019, the company reported sales of US $ 8.8 billion in major property, facilities and project management, leasing, capital markets, appraisal and development services. ‘other services. PTI MJH MR MR

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