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MARKETVIEW

India Retail, H1 2018


Supply of 1.9 million sq. ft.;
global retailers - Bath &
Body Works, Berluti, Dyson
made inroads into India
Rents Up Rents Stable Rents Down Consumer Supply (Y-O-Y)
14 Markets 15 Markets 0 Market Confidence 5%

*Arrows indicate change over H2 2017 rentals in high streets.


The year 2018 has seen a mitigation of the The central bank also revised up the retail
hurdles that had impeded the Indian economy’s inflation target range to 4.8-4.9% for the first half
growth from last year. The quarter ended March of 2018-19 and to 4.7% in the second half, after
2018 was especially positive from an economic considering the impact of house rent allowance
perspective as the country’s GDP growth reached (HRA) on central government employees.
a two-year high of 7.7%, compared with 7% in
the previous quarter. The continued sturdy ADDITIONAL 1.9 MILLION SQ. FT. OF FRESH
economic performance prompted the SUPPLY; CHENNAI AND HYDERABAD LEAD

government to raise its projected 2017-18 growth SUPPLY


rate by 0.1 percentage point to 6.7%.
The Indian retail real estate market witnessed
The upward momentum was largely attributed to continuous foray of international brands, launch
the construction and manufacturing sectors, of retail developments and sustained demand for
which grew by 11.5% and 9.1% respectively on a space in H1 2018. The first half of 2018 saw an
quarterly basis. In addition, sectors such as addition of about 1.9 million sq. ft. of fresh
public administration, defense and other services supply across the seven key cities, led by
(13.3%), electricity, gas, water supply & other Chennai, Hyderabad and the National Capital
utility services (7.7%), and trade, hotels, Region (NCR). The review period witnessed the
transport and communication (6.8%) also launch of VR Mall (1 million sq. ft.) in Chennai,
contributed to this strong momentum. However, L&T Hyderabad Next and L&T Next Galleria
the growth of real estate services (along with (totaling 0.65 million sq. ft.) in Hyderabad, and
financial, insurance and professional services) 32nd Avenue (0.25 million sq. ft.) in Gurgaon-
sector dipped from 5.7% to 5% on a half yearly NCR.
basis.
INTERNATIONAL RETAILERS AND LOCAL
After declining slightly to 4.3% in March 2018, THEATRE BRANDS IN EXPANSION MODE

retail inflation (measured by consumer price


inflation or CPI) continued to rise, owing to International brands such as Tom Tailor, Miniso,
record high fuel prices across the country. It was Taco Bell, Mango, Marks and Spencer, H&M and
recorded at 4.6% in April 2018 and at 4.9% in Starbucks continued to expand operations by
May 2018, making the RBI raise the repo rate by entering new markets across the country. Even
25 bps to 6.25%. Consequently, the reverse repo homegrown departmental store chains such as
rate increased from 5.75% to 6%. This was the Shoppers Stop, Central, Lifestyle, Max and
RBI’s first repo rate hike in four years and Pantaloons were in an expansionary mode and
marked a tactical shift in its policy stance.

H1 2018 CBRE Research © 2018, CBRE, Inc | 1


MARKETVIEW INDIA RETAIL

opened stores in Chennai, Hyderabad, Mumbai property into a viable retail asset by altering its
and Pune. Leading international brands such as positioning/tenant mix to make it relevant as per
Dyson, Molton Brown, Berluti, American Eagle, the target catchment.
Antony Morato, Daniel Wellington and Bath &
Body Works made inroads into India with their Shorter lease terms: Landlords are adopting
first stores becoming operational during H1 shorter lease terms of 5-6 years as opposed to the
2018. Meanwhile, multiplex operators such as 9-year lease term in the past in order to maintain
PVR and Inox continued to take up space across a dynamic tenant mix and remain competitive in
various cities. the current environment.

SELECT PRIME AREAS WITNESS RENTAL Leading International brands in Tier II cities:
APPRECIATION Rising consumer base and increasing spending
potential even in Tier II cities has generated an
Rental trends varied across key high streets in opportunity for many retailers that are making a
major cities during H1 2018. Rentals appreciated beeline towards several tier II cities. As these
in high-street markets such as Khan Market, DLF locations are uncharted and real estate costs are
Galleria (NCR), Commercial Street, Jayanagar relatively lower than those in metro cities, several
11th Main 4th Block, Kammanahalli/HRBR leading brands are setting up stores in cities such
Layout (Bangalore), Jubilee Hills Road No. 36 as Jaipur, Chandigarh, Kochi, Bhubaneshwar and
(Hyderabad), Linking Road (Mumbai, MG Road Nagpur, among others.
and Aundh (Pune). On the other hand, rentals
remained stable in most of the other high-streets Size is not the only determinant of quality:
across the country. Rentals across organized Apart from mall clusters and high street
retail developments also displayed a varied trend locations, an emerging asset class is making an
– mall rentals remained stable in some cities appearance in the form of small investment
(Hyderabad, Mumbai, Pune and Kolkata), and grade developments. These developments
increased in others (Bangalore, Chennai and provide a retail mix which includes top brands in
NCR) due to growing demand from domestic as apparel, F&B, furniture, accessories, etc. and are
well as international retail brands. located within prime commercial districts of the
city.
KEY TRENDS ACROSS THE RETAIL SEGMENT:
Investments in the retail segment: Retail has
Omni-channel retailing: Most prominent garnered interest and confidence among
brands are moving towards omni-channel institutional investors over the past two-three
retailing, a fully-integrated approach to shopping years, especially towards quality retail assets.
that provides consumers a unified experience Consequently, developers of several retail malls
across online and offline platforms. Omni- are re-evaluating their portfolio to create a retail
channel shopping extends from brick-and- space that has an optimum balance of tenant
mortar locations to mobile apps, e-commerce mix, target catchment and customer experience.
marketplaces, onsite storefronts, social media,
etc. in order to provide a full shopping
experience to consumers.

Redevelopment of properties: Redevelopment


of old properties/retail properties is on the rise,
especially in Delhi-NCR, to transform the

H1 2018 CBRE Research © 2018, CBRE, Inc | 2


MARKETVIEW INDIA RETAIL

Figure 1: High Street and Malls -Annual and Six Monthly Average Rental Movement (%) Across Major Cities

40
6 month change (%)
Y-o-Y (%)

30

20

10

(10)

(20) Velachery
Saket District Center (Malls)
Gurgaon (Malls)

Central Hyderabad (Malls)


Central Mumbai (Malls)
South Extension

Himayat Nagar
West Bangalore

Anna Nagar 2nd Avenue

Banjara Hills Road No.2


East Brigade Malls - (Airport Road, Ulsoor, Whitefield)
Noida (Malls)

Ampa Skywalk Mall


Kemps Corner
Connaught Place

Linking Road

NCR Mumbai Bangalore Chennai Hyderabad

Source: CBRE Research, H1 2018


**Rents mentioned in the report are indicative rentals based on super / built-up area in both high street locations and mall developments.

H1 2018 CBRE Research © 2018, CBRE, Inc | 3


MARKETVIEW NATIONAL CAPITAL REGION (NCR)

MARKET SUMMARY Figure 2: High Street Rental Value Movement

1,600
Both domestic and international players were
1,400
active in the leasing landscape in H1 2018.
Leasing activity was led by accessories’ retailers, 1,200

followed by jewelry, electronics, furniture and toy 1,000

(INR / sq. ft. / month)


companies – with Disney opening three stores 800
this quarter, while Pepperfry and Dyson opened 600
two stores each in Delhi. Retail stores of varied 400
sizes opened outlets across prominent shopping 200
centers and high streets, ensuring that retail 0
activity in the region remained steady. In malls, H1 2016 H2 2016 H1 2017 H2 2017 H1 2018
key deals involved the expansion of brands such
Khan market South Extension Connaught Place Galleria Market
as Pepperfry at DLF Mall of India, Noida; Dyson
at DLF Promenade, Vasant Kunj; and Urban Source: CBRE Research, H1 2018.
Ladder at DT Mega Mall, Gurgaon. Meanwhile,
MI Experience Store, Starbucks and Kapoor Figure 3: Shopping Centre Value Movement
Watch opened new outlets at the high street 900
locations of Connaught Place, Green Park and 800
South Extension, respectively. DLF Chanakya has 700
emerged as a prominent luxury retail destination
600
housing premium retailers such as Mont Blanc,
(INR / sq. ft. / month)

500
Jaeger-LeCoultre, Panerai Boutique, Hermes,
400
Ralph Lauren, Ted Baker, Diesel among others.
300

Delhi-NCR continued to be the gateway for global 200

players that were eyeing high streets to 100

launch/expand their operations. Leading Cash & 0


H1 2016 H2 2016 H1 2017 H2 2017 H1 2018
Carry player - Siam Makro opened its first B2B Saket District Centre Vasant Kunj Noida Gurgaon
wholesale store in Delhi at Netaji Subhash Place
Metro Station. Other players such as Miniso and Source: CBRE Research, H1 2018.
Sunar Jewellers also expanded presence across Table 1: Key Brands Launched
the city’s high streets. In addition, international
brand Bath & Body Works opened its first store in Brand Category Presence
the country at Select Citywalk, Saket followed by Accessories, Beauty,
Bath & Body Works Select Citywalk
another store at DLF Mall of India - Noida. Perfumes
DLF Promenade
Supply addition in NCR in the first six months of Dyson Electronics
Select Citywalk
2018 included 32nd Avenue, Gurgaon, a curated
Mall of India
F&B and lifestyle destination spread over 0.25
million sq. ft. The development is a part of a Ambience Mall, Vasant
Disney Toys
larger, 2.5 million sq. ft. mixed-use development. Kunj
Ambience Mall, Vasant Kunj added additional
Ambience Mall, Gurgaon
FSI to offer more retail area (0.25 million sq. ft.)
on the lower ground floor in order to plug the Siam Makro Cash and Carry -
gap that the micro-market had in terms of
American Eagle Fashion Mall of India
premium ethnic/fusion wear for women.

Source: CBRE Research, H1 2018.

H1 2018 CBRE Research © 2018, CBRE, Inc | 4


MARKETVIEW NATIONAL CAPITAL REGION (NCR)

RENTAL TRENDS of 8-15% on a half yearly basis, largely driven by


limited vacancy and strong occupier interest in
In H1 2018, prime mall developments across all prime developments.
micro-markets in the region such as Saket
District Center and those in Noida witnessed a On the other hand, rental values in the high
rental increase of 5-8% on a half yearly basis streets of Khan Market and DLF Galleria
however, locations such as Vasant Kunj and increased by 8-17% on a half yearly basis.
Gurgaon witnessed a steep rental increase

Table 2: Selected Leasing Transactions


Property District Size (in sq. ft.) Tenant

Mall of India Noida 5,400 Pepperfry

MGF Metropolitan Gurgaon 2,800 Miniso

Connaught Place New Delhi 1,700 MI Phones

Galleria Market Gurgaon - Pandora


Source: CBRE Research, H1 2018.

Table 3: Key Retail Project Completions

Property Developer District Size ( Sq.Ft)

32nd Avenue, Gurgaon Milestone Ventures Gurgaon 250,000


Source: CBRE Research, H1 2018.

Table 4: Sub-market Key Stats


Average Rent in H1 Average Rent in H2 Half Yearly Y-o-Y Change
High Streets 2018 (INR/sq. ft. / 2017 (INR/sq. ft. / Change (%) (%)
month) month)

Khan Market 1,400 - 1,700 1,300 - 1,550 8.8 8.8

South Extension 800 - 1,000 800 - 1,000 0.0 0.0

Connaught Place 1,000 - 1,100 1,000 - 1,100 0.0 0.0

Galleria Market, Gurgaon 700 - 750 600 - 650 16.0 16.0


Average Rent in H1 Average Rent in H2 Half Yearly Y-o-Y Change
Mall Clusters 2018 (INR/sq. ft. / 2017 (INR/sq. ft. / Change (%) (%)
month) month)

Saket District Centre 750 - 850 700 - 800 6.7 10.3

Vasant Kunj 550 - 650 500 - 600 9.1 20.0

Noida 400 - 500 375 - 475 5.9 12.5

Gurgaon 550 - 650 500 - 550 14.3 29.7

Source: CBRE Research, H1 2018.

H1 2018 CBRE Research © 2018, CBRE, Inc | 5


MARKETVIEW MUMBAI

MARKET SUMMARY Figure 4: High Street Rental Value Movement

Leasing activity in Mumbai in H1 2018 was a 800


healthy mix of space take-up by domestic and 700
international players, with most of the activity 600
being driven by players in the apparel segment
500

(INR / sq. ft. / month)


followed by sports’ retailers. There was steady
demand for established shopping centers 400

locations such as Malad and Goregoan in western 300


suburbs and Thane and Kalyan along the eastern 200
corridor. The city did not witness any addition of
100
fresh supply during the review period. However,
0
the second half of the year is expected to witness H1 2016 H2 2016 H1 2017 H2 2017 H1 2018
the completion of approximately 0.8 million sq.
Linking Road Colaba Causeway Kemps Corner
ft. of organized retail space in Bandra Kurla
Complex (BKC). Source: CBRE Research, H1 2018.
Figure 5: Shopping Centre Value Movement
Fashion and apparel continued to dominate
800
leasing activity with brands such as Central
leasing space in Goregaon. In addition, brand 700
factory also opened two stores in quick 600
succession; one at Mindspace, Malad and 500
another one at Sarvodaya Mall, Kalyan.
(INR / sq. ft. / month)

400
Decathlon expanded operations by leasing space
at Atria Mall, Worli and Trishul Icon, Navi 300
Mumbai. 200

100
F&B, leisure and wellness players were active in
0
the market. Popular F&B player, Social opened its
H1 2016 H2 2016 H1 2017 H2 2017 H1 2018
20th outlet at Carter road, Mumbai, while a Central Mumbai
number of cafés and all-day diners (such as Tea Western Suburbs(Andheri/ Goregaon / Malad)
Villa) came up across the city. Eastern Suburbs (Kurla/Ghatkopar/Bhandup)

Source: CBRE Research, H1 2018.


RENTAL TRENDS

Table 5: Key Brands Launched


Rentals remained largely remained stable; both
across high streets and organized retail due to Brand Category Presence
steady demand. However, due to limited
Antony Morato Accessories Palladium
availability of space led to a 16-18% increase in
rental values across Linking road.
Daniel Wellington Accessories Brady House

Source: CBRE Research, H1 2018.

H1 2018 CBRE Research © 2018, CBRE, Inc | 6


MARKETVIEW MUMBAI

Table 6: Selected Leasing Transactions


Property District Size (in sq. ft.) Tenant

Sarvodaya Mall Kalyan 20,000 Brand Factory


Atria Mall Worli 20,000 Decathlon
Oberoi Mall Goregaon 10,000 Marks and Spencer
R Mall Thane 7,000 Westside
High Street Fort 1,800 Daniel Wellington

Source: CBRE Research, H1 2018.

Table 7: Sub-market Key Stats


Average Rent in H1 Average Rent in H2 Half Yearly Y-o-Y Change
High Streets 2018 (INR/sq. ft. / 2017 (INR/sq. ft. / Change (%) (%)
month) month)

Linking Road 600 - 800 500 - 700 16.7 16.7

Colaba Causeway 450 - 600 450 - 600 0.0 0.0

Kemps Corner 450 - 500 450 - 500 0.0 0.0


Average Rent in H1 Average Rent in H2 Half Yearly Y-o-Y Change
Mall Clusters 2018 (INR/sq. ft. / 2017 (INR/sq. ft. / Change (%) (%)
month) month)

Central Mumbai 600 - 750 600 - 750 0.0 0.0


Western Suburbs (Andheri, Goregaon,
250 - 390 250 - 390 0.0 0.0
Malad)
Eastern Suburbs (Kurla, Ghatkopar,
125 - 290 125 - 290 0.0 0.0
Bhandup)
Source: CBRE Research, H1 2018.

H1 2018 CBRE Research © 2018, CBRE, Inc | 7


MARKETVIEW BANGALORE

MARKET SUMMARY Figure 6: High Street Rental Value Movement

400
Leasing activity in Bangalore during H1 2018 was
350
witnessed across organized retail developments
such as VR Mall, Phoenix Market City Mall, Park 300
Square Mall and Garuda Mall. There was 250

(INR. / sq. ft. / month)


negligible addition of fresh supply as most
200
developments are scheduled for completion in
150
H2 2018.
100
The city witnessed the launch of several retail 50
outlets. These included Project Eve (VR Mall) and
0
Street Mama (F&B) in Garuda Mall, HomeLane H1 2016 H2 2016 H1 2017 H2 2017 H1 2018
(furniture) in Park Square Mall, along with Commercial Street Brigade Road
Jayanagar 11th Main 4th Block 100 Fee t Road, Indiranagar
Miniso (variety store) in Phoenix Market City New BEL Road Kammanahalli /HRBR Layout
Mall. Across the high street segment, brands
Source: CBRE Research, H1 2018.
such as Xiaomi, Urban Ladder, Casio, 1441
Pizzeria, Panasonic, One Plus and Pasta Street Figure 7: Shopping Centre Value Movement
continued to expand across prominent high 250
street locations such as 100 Feet Road Indira
Nagar, Jayanagar and JP Nagar.
200

RENTAL TRENDS
150
(INR / sq. ft. / month)

On a half-yearly basis, rental values for high


100
street locations of Commercial Street, Jayanagar
11th Main 4th Block, Kammanahalli /HRBR
Layout appreciated by about 4-9%, owing to 50

increasing demand for quality retail space.


However, rentals for 100 Feet Road Indira Nagar 0
H1 2016 H2 2016 H1 2017 H2 2017 H1 2018
and New BEL Road remained stable. Among
CBD /Off CBD Sou th Bang alore (Kor ama ngala ,
organized mall developments, half-yearly rental Jayanag ar)
increments in CBD/Off CBD, South Bangalore East Ban galore (A irpor t Ro ad, Ulsoor ,Wh itefield ) ORR

and ORR were in the range of 3-5%, however, W est Ban galor e

East Bangalore witnessed an increase of around


Source: CBRE Research, H1 2018.
11-13%. On the other hand, rental values for the
mall clusters of West Bangalore remained largely
stable. Table 8: Key Brands Launched

Brand Category Presence

Miniso Lifestyle Mahadevpura

Kioda Lifestyle Mahadevpura

Maziga Restaurant F&B Mahadevpura

Source: CBRE Research, H1 2018.

H1 2018 CBRE Research © 2018, CBRE, Inc | 8


MARKETVIEW BANGALORE

Table 9: Selected Leasing Transactions


Property District Size (in sq. ft.) Tenant

Hennur Road North Bangalore 45,000 Byg Brewski

VR Mall East Bangalore 12,700 Project Eve

Garuda Mall South Bangalore 6,000 Street Mama

Phoenix Market City Mall East Bangalore 4,500 Miniso

VR Mall East Bangalore 4,000 Maziga Restaurant

Source: CBRE Research, H1 2018.

Table 10: Sub-market Key Stats

Average Rent in H1 Average Rent in H2


2017 (INR/sq. ft. / Half Yearly Y-o-Y Change
High Streets 2018 (INR/sq. ft. /
month) Change (%) (%)
month)

Commercial Street 300 - 350 275 - 325 8.3 18.2

Brigade Road 320 - 360 320 - 350 1.5 13.3

Jayanagar 11th Main 4th Block 330 - 350 300 - 330 7.9 18.3

100 Feet Road, Indiranagar 175 - 225 175 - 225 0.0 0.0

New BEL Road 150 - 170 150 - 170 0.0 0.0

Kammanahalli /HRBR Layout 150 - 175 150 – 160 4.8 8.3

Average Rent in H1 Average Rent in H2


2017 (INR/sq. ft. / Half Yearly Y-o-Y Change
Mall Clusters 2018 (INR/sq. ft. /
month) Change (%) (%)
month)

CBD /Off CBD 200 - 260 180 - 260 4.5 4.5

South Bangalore (Koramangala,


150 - 190 150 - 180 3.0 3.0
Jayanagar)
East Bangalore (Airport Road,
120 - 160 120 - 130 12.0 12.0
Ulsoor,Whitefield)

ORR 80 - 95 80 - 90 2.9 16.7

West Bangalore 160 - 180 160 - 180 0.0 3.0

Source: CBRE Research, H1 2018.

H1 2018 CBRE Research © 2018, CBRE, Inc | 9


MARKETVIEW HYDERABAD

MARKET SUMMARY Figure 8: High Street Rental Value Movement

Retail leasing activity in Hyderabad was resilient 140


during the first half of 2018, led primarily by the
120
opening of two new malls by L&T Constructions
100
as part of their Transit Oriented Development

(INR / sq. ft./.month)


(TOD). The two developments – L&T Hyderabad 80
Next and L&T Next Galleria – together span about 60
0.65 million sq. ft. The high street segment, 40
comprising locations such as Banjara Hills,
20
Gachibowli and Kukatpally, also witnessed
0
strong leasing activity. The city witnessed the
H1 2016 H2 2016 H1 2017 H2 2017 H1 2018
entry of American fast food retail chain Taco Bell,
which opened an outlet in L&T Hyderabad Next Himayat Nagar Jubilee Hills Road No. 36 Banjara Hills Road No.2
mall in Punjagutta.
Source: CBRE Research, H1 2018.

Retailers across categories continued to lease


Figure 9: Shopping Centre Value Movement
space in high street locations. Department Store
chain, Central opened a store at Gachibowli, 90
while Decathlon launched its fifth outlet in the
80
city at L&T Erramanzil. Apparel retailers such as
70
Westside, The Chennai Silks and Unlimited
60
(INR / sq. ft. / month)

continued to expand their presence in the city. In


the electronics segment, Pai Electronics 50

continued their expansion drive by opening two 40


more outlets in Kondapur and Tirumalagiri. 30
20
In the organized retail segment, leasing activity 10
was primarily led by the newly operational malls.
0
Apparel brands such as Shoppers Stop, Max, H1 2016 H2 2016 H1 2017 H2 2017 H1 2018
Pantaloons and Marks & Spencer opened outlets Central Hyderabad (Banjara Hil ls, Panjagutta) Western Suburbs (Cyberabad, Kukatpal ly)
in L&T Hyderabad Next, while multiplex operator
Source: CBRE Research, H1 2018.
PVR took up space in L&T Next Galleria.

RENTAL TRENDS Table 11: Key Brands Launched

Rental values across high streets such as Jubilee Brand Category Presence
Hills Road No. 36, Himayat Nagar witnessed an
increase of about 14-16% and 8-10% respectively Taco Bell F&B Hyderabad Next
on a half yearly basis owing to increase in
Source: CBRE Research, H1 2018.
demand from retailers. However, rentals in
Banjara Hills road no. 2 remained largely stable.
Similarly, rental values in organized retail
developments too remained predominantly
stable.

H1 2018 CBRE Research © 2018, CBRE, Inc | 10


MARKETVIEW HYDERABAD

Table 12: Selected Leasing Transactions

Property District Size (in sq. ft.) Tenant

High Street Secunderabad 13,500 Westside

High Street Banjara Hills 12,500 Ashley Furniture

High Street Mehdipatnam 9,000 The Chennai Silks

High Street Tirumalagiri 9,000 Pai Electronics

Source: CBRE Research, H1 2018.

Table 13: Key Retail Project Completions

Property Developer District Size ( Sq.Ft)

L&T Hyderabad Next L&T Punjagutta 450,000


L&T Next Galleria L&T Madhapur 200,000

Source: CBRE Research, H1 2018.

Table 14: Sub-market Key Stats


Average Rent in H1 Average Rent in H2 Half Yearly Y-o-Y Change
High Streets 2018 (INR/sq. ft. / 2017 (INR/sq. ft. / Change (%) (%)
month) month)

Himayat Nagar 140 - 150 130 - 135 9.4 9.4

Jubilee Hills Road No. 36 130 - 135 110 - 120 15.2 15.2

Banjara Hills Road No.2 150 - 170 150 - 170 0.0 6.7

Average Rent in H1 Average Rent in H2 Half Yearly Y-o-Y Change


Mall Clusters 2018 (INR/sq. ft. / 2017 (INR/sq. ft. / Change (%) (%)
month) month)

Central Hyderabad (Banjara Hills,


80 - 85 80 - 85 0.0 0.0
Panjagutta)
Western Suburbs (Cyberabad,
65 - 70 65 - 70 0.0 0.0
Kukatpally)

Source: CBRE Research, H1 2018.

H1 2018 CBRE Research © 2018, CBRE, Inc | 11


MARKETVIEW CHENNAI

MARKET SUMMARY Figure 10: High Street Rental Value Movement

Demand for retail space remained steady across 200

high streets and prominent mall developments


of the city. Leasing activity was driven by 150
domestic apparel, electronics and F&B operators.

(INR / sq. ft. / month)


During the review period, the city witnessed 100
completion of VR Mall, an organized retail
development, by Virtuous Retail. The mall has a
50
leasable area of about 1.0 million sq. ft., with
H&M, Marks & Spencer, Westside, Lifestyle, Max,
Pantaloons, Trends as anchor tenants, along 0
H1 2016 H2 2016 H1 2017 H2 2017 H1 2018
with a Fun City Entertainment Centre and a PVR Nungambakkam High Road T Nagar - Pondy Bazzar Anna Nagar - 2nd Avenue
multiplex. The mall also houses international Ve lachery Adyar Al warpet
retailers such as Hamleys, Forever 21, Steve
Source: CBRE Research, H1 2018.
Madden, Superdry, Vero Moda and Starbucks,
along with a co-working space “The Hive”.
Figure 11: Shopping Centre Value Movement

Across high streets, apparel players led leasing 400


activity, with brands such as Raymonds opening
outlets across Anna Nagar and Cathedral Road;
300
Biba setting up a new store in Nungambakkam;
(INR / sq. ft. / month)

and Neerus launching an outlet on Cathedral


200
Road. In addition, Harley Davidson
(automobile), Poorvika (electronics), KFC (F&B)
and 7 Sports (sports and fitness) opened outlets 100
across high street locations.
0
RENTAL TRENDS H1 2016 H2 2016 H1 2017 H2 2017 H1 2018
Spencer Plaza (Anna Salai) Chennai Ci ti Cente r (RK Salai)
Ampa Sk ywalk Mall (Poonamal le High Road) Express Avenue (Royapetah)
Despite steady retail activity, rental values across Phoni x Market City (Velachery) Vi jaya Forum Mall (Vadapalani)
high streets largely remained stable during the Grand Mall

review period. Alwarpet and Adyar were Source: CBRE Research, H1 2018.
exceptions as they witnessed a 3-6% half-yearly
rise in rentals due to lack of quality retail space. Table 15: Key Brands Launched
In the organized segment, rental values in Brand Category Presence
prominent malls such as Express Avenue,
Nungambakkam,
Phoenix Market City and Vijaya Forum mall Drunken Monkey F&B Alwarpet, Anna
appreciated by about 6-9% on a half-yearly basis. Nagar, ECR
However, rentals in other malls remained stable Wire Room Bar &
F&B Phoenix Market City
during the review period. Kitchen
Source: CBRE Research, H1 2018.

H1 2018 CBRE Research © 2018, CBRE, Inc | 12


MARKETVIEW CHENNAI

Table 16: Selected Leasing Transactions

Property District Size (in sq. ft.) Tenant

High Street Kottivakkam Omr 7,000 Boites Bar


High Street Anna Nagar 3,500 Diadem Jewelry
High Street Nungambakkam 3,000 Harley Davidson

Source: CBRE Research, H1 2018.

Table 17: Key Retail Project Completions

Property Developer District Size ( Sq.Ft)

The Metro Zone (VR Mall) Ozone Group Anna Nagar 1,000,000

Source: CBRE Research, H1 2018.

Table 18: Sub-market Key Stats


Average Rent in H1 Average Rent in H2
Half Yearly Y-o-Y Change
High Streets 2018 (INR/sq. ft. / 2017 (INR/sq. ft. /
Change (%) (%)
month) month)

Nungambakkam High Road 140 - 160 140 - 160 0.0 0.0

T Nagar - Pondy Bazzar 170 - 190 170 - 190 0.0 0.0

Anna Nagar - 2nd Avenue 140 - 150 140 - 150 0.0 0.0

Velachery 80 - 100 80 - 100 0.0 -10.0

Adyar 130 - 160 130 - 150 3.6 3.6

Alwarpet 130 - 160 125 - 150 5.5 5.5

OMR 90 - 110 90 - 110 0.0 0.0

Average Rent in H1 Average Rent in H2 Half Yearly Y-o-Y Change


Mall Clusters 2018 (INR/sq. ft. / 2017 (INR/sq. ft. / Change (%) (%)
month) month)

Chennai Citi Center (RK Salai) 100 - 110 100 - 110 0.0 -4.5
Ampa Skywalk Mall (Poonamallee
130 - 140 130 - 140 0.0 -3.6
High Road)
Express Avenue (Royapettah) 300 - 325 275 - 300 8.7 8.7

Phoenix Market City (Velachery) 300 - 350 275 - 325 8.3 8.3

Vijaya Forum Mall (Vadapalani) 200 - 250 190 - 230 7.1 7.1

Grand Mall (Velachery) 90 - 100 90 - 100 0.0 0.0

Source: CBRE Research, H1 2018.

H1 2018 CBRE Research © 2018, CBRE, Inc | 13


MARKETVIEW PUNE

MARKET SUMMARY Figure 12: High Street Rental Value Movement

Strong demand for retail space was observed 350


across high streets as well as prominent mall 300
developments in the city. Leasing activity was
250
driven by both domestic and international F&B

(INR / sq. ft. / month)


operators. The city witnessed negligible supply 200

addition during the review period. 150

100
Pune also reported the entry of new F&B players
50
such as The Daily and Tea Villa, which opened
outlets across high street locations such as 0
H1 2016 H2 2016 H1 2017 H2 2017 H1 2018
Baner, Koregaon Park and Viman Nagar, while
Autobahn and Social opened outlets in Phoenix
MG Road JM Road Aundh Koregaon Park
Market City, Viman Nagar.
Source: CBRE Research, H1 2018.

In addition, high street locations also witnessed


Figure 13: Shopping Centre Value Movement
expansion by players such as Croma in Baner,
Toyota on SB Road and Masala Bar in Balewadi. 200
Prominent apparel retailers such as Pantaloons 180
and Tom Tailor opened new stores in Westend 160
Mall and Phoenix Market City. 140
120
(INR / sq. ft. / month)

RENTAL TRENDS 100


80
Growing enquiries for quality space across high- 60
street locations led to a rental appreciation of 8- 40
10% at MG Road and 11-12% in Aundh during 20
the review period. However, rental values in the 0
H1 2016 H2 2016 H1 2017 H2 2017 H1 2018
organized retail segment remained stable.
MG Road Nagar Road Koregaon Park /
Bund Garden Road

Source: CBRE Research, H1 2018.

Table 19: Key Brands Launched


Brand Category Presence

Autobahn F&B Phoenix Market City

The Daily F&B Koregaon Park

Social F&B Phoenix Market City

Source: CBRE Research, H1 2018.

H1 2018 CBRE Research © 2018, CBRE, Inc | 14


MARKETVIEW PUNE

Table 20: Selected Leasing Transactions

Property District Size (in sq. ft.) Tenant

High Street SBD 9,500 Croma

Westend Mall SBD 8,000 Pantaloons

Seasons Mall SBD 7,000 FML

Source: CBRE Research, H1 2018.

Table 21: Sub-market Key Stats


Average Rent in H1 Average Rent in H2
Half Yearly Y-o-Y Change
High Streets 2018 (INR/sq. ft. / 2017 (INR/sq. ft. /
Change (%) (%)
month) month)

MG Road 250 - 275 225 - 250 9.4 9.4

JM Road 250 - 275 250 - 275 0.0 0.0

Aundh 130 - 160 120 - 140 11.5 11.5

Koregaon Park 140 - 150 140 - 150 0.0 0.0

Average Rent in H1 Average Rent in H2


Half Yearly Y-o-Y Change
Mall Clusters 2018 (INR/sq. ft. / 2017 (INR/sq. ft. /
Change (%) (%)
month) month)

MG Road 125 -140 125 -140 0.0 0.0

Nagar Road 150 - 200 150 - 200 0.0 0.0

Koregaon Park/ Bund Garden Road 80 - 100 80 - 100 0.0 0.0

Source: CBRE Research, H1 2018.

H1 2018 CBRE Research © 2018, CBRE, Inc | 15


MARKETVIEW KOLKATA

MARKET SUMMARY Figure 14: High Street Rental Value Movement

450
Kolkata continued to attract interest from
retailers in the first half of the year. The high 400

street segment led transaction activity in the city, 350


followed by activity in organized retail. Apparel 300

(INR / sq. ft. / month)


and F&B players dominated leasing activity. The 250
review period marked the foray of leading 200
international brands in the Kolkata market -
150
Starbucks entered East India with its first outlet
100
in Kolkata at Park Street, while GAP and Sephora
50
made their market entry through South City
Mall. However, the city did not witness any new 0
H1 2016 H2 2016 H1 2017 H2 2017 H1 2018
space addition during the review period. Park Street Elgin Road Camac Street, Shakespeare Sarani

RENTAL TRENDS Source: CBRE Research, H1 2018.

Rental values remained stable in both organised


and high street retail segments. Figure 15: Shopping Centre Value Movement
350

300

250
(INR / sq. ft. / month)

200

150

100

50

0
H1 2016 H2 2016 H1 2017 H2 2017 H1 2018
E M Bypass Salt Lake Jadavpur

Source: CBRE Research, H1 2018.

H1 2018 CBRE Research © 2018, CBRE, Inc | 16


MARKETVIEW KOLKATA

Table 22: Selected Leasing Transactions

Property District Size (in sq. ft.) Tenant

High Street SBD 23,000 FBB


High Street SBD 18,000 Brand Factory
High Street CBD 12,000 Reliance Trendz
High Street CBD 10,000 City Life
High Street SBD 1,600 Starbucks

Source: CBRE Research, H1 2018.

Table 23: Sub-market Key Stats

Average Rent in H1 Average Rent in H2 Half Yearly Y-o-Y Change


High Streets 2018 (INR/sq. ft. / 2017 (INR/sq. ft. / Change (%) (%)
month) month)
Park Street 350 - 450 350 - 450 0.0 0.0
Elgin Road 275 - 325 275 - 325 0.0 0.0
Camac Street, Shakespeare Sarani 275 - 325 275 - 325 0.0 0.0
Average Rent in H1 Average Rent in H2 Half Yearly Y-o-Y Change
Mall Clusters 2018 (INR/sq. ft. / 2017 (INR/sq. ft. / Change (%) (%)
month) month)

EM Bypass 160 - 200 160 - 200 0.0 0.0


Salt Lake 300 - 330 300 - 330 0.0 0.0
Jadavpur 275 - 300 275 - 300 0.0 0.0

Source: CBRE Research, H1 2018.

H1 2018 CBRE Research © 2018, CBRE, Inc | 17


MARKETVIEW OUTLOOK

OUTLOOK Rental values are expected to witness varying


trends across high street locations and mall
Quality supply infusion is expected in the second clusters throughout India. Although adequate
half of 2018 across most major cities such as supply is lined up in all major cities in H2 2018,
NCR, Mumbai, Bangalore, Chennai and the rental trajectory is dependent on timely
Hyderabad. Close to around 4 – 5 million sq. ft. delivery of these investment grade developments.
of new supply is expected to come onstream in Rental growth at most high street locations in
H2 2018. With retailers expanding across Metro metro cities is at its peak, so it is expected to
and key tier I cities, demand is likely to continue remain stable at these locations.
to outstrip supply in most major cities.
The retail segment in India is undergoing a rapid
International fashion brands such as H&M, transformation and retailers are increasingly
Marks and Spencer are expected to expand across adapting to a variety of store formats to address
metro cities as well as enter new tier I and tier II the needs of different markets and locations. We
cities. Prominent retail developer, Phoenix Mills anticipate that this trend will continue, and
Ltd recently acquired under-construction retail retailers will experiment with more creative
assets in Indore and Lucknow. With REIT’s in the formats. Digital and virtual stores are already
offing, the focus on developing investment grade making their way in cities such as Bangalore,
developments is likely to redefine the retail with such technologies expected to get even
segment in these tier II cities. more sophisticated in 2018. Although brick-and-
mortar stores will continue to flourish, retailers
Retail categories such as Fashion, Departmental who realign as per customer expectations and
Stores, Sports & Leisure, and Food & Beverages explore the most relevant store formats for their
will continue to dominate the leasing activity in brands will survive and thrive.
H2 2018. F&B segment is likely to emerge as a
healthy mix of operators. In addition, multiplex
operators are anticipated to broaden their
presence across major markets in quality
developments across tier I and tier II cities.

H1 2018 CBRE Research © 2018, CBRE, Inc | 18


MARKETVIEW INDIA RETAIL

CONTACTS Please visit the Global Research Gateway


at www.cbre.com/research-and-reports
Abhinav Joshi
Head of Research, India CBRE
+91 124 465 9700
abhinav.joshi@cbre.co.in

Vidhi Dheri
Sr. General Manager, India CBRE
+91 11 4239 0200
vidhi.dheri@cbre.co.in

Uttara Nilawar
Assistant General Manager, India CBRE
+91 44 4069 0228
uttara.nilawar@cbre.com

Bimal Sharma
Head - Retail Services, Transaction
Management Group, India CBRE
First Floor, Hulkul Brigade Centre
No 82 Lavelle Road
Bangalore 560 001
+91 80 4074 0000
bimal.sharma@cbre.co.in

Disclaimer: CBRE Limited confirms that information contained herein, including projections, has been obtained from sources believed to be reliable. While we do not doubt its accuracy, we have
not verified it and make no guarantee, warranty or representation about them. It is your responsibility to confirm independently their accuracy and completeness. This information is presented
exclusively for use by CBRE clients and professionals, and all rights to the material are reserved and cannot be reproduced without prior express written permission of CBRE.
CIN - U74140DL1999PTC100244